Newton v. State

Offutt, J., delivered the opinion of the Court. The appellant in this case was tried and convicted in the Criminal Court of Baltimore City of a criminal conspiracy, for which he had been indicted jointly with William A. Gillespie and Iiarokl R. Hickey, Jr., and from the judgment on the verdict in that case he has taken this appeal. ⁷⁵ Demurrers to the indictment filed by each defendant were overruled, and Gillespie and Dickey were tried before the court and convicted on June 23rd, 1923. On September 24th, 1923, Newton filed a suggestion and affidavit for removal, which was also overruled. He then pleaded not guilty and was tried by the jury, with the result stated above.

The record contains eighty-five exceptions, eighty-four of which relate to remarks made by the court and by the State’s Attorney during the progress of the trial, and to rulings of the court upon questions of evidence, and these rulings, together with the action of the court on the demurrer to the indictment, and its action upon the suggestion and affidavit for removal, we are now asked to review. The facts material to a consideration of the questions before us 'are sufficiently set out in the cases of State v. Gillespie and State v. Dickey, decided at this term ( 147 Md. 45 ), and need not be restated here. Nor in view of what we said in those cases is it necessary to refer further to the court’s action on the demurrer to the indictment than to say that in our opinion it was properly overruled. Of the other questions presented by the appeal the first in natural order is the propriety of the court’s action on the suggestion and affidavit for removal.

That suggestion was based upon the theory that since Gillespie and Dickey had been tried and convicted by three judges of the Supreme Bench of Baltimore City of the same crime with which Newton is charged in this case, that any jury in Baltimore City would inevitably be affected by that fact and that no jury could be empanelled in that circuit “which would have the courage to override the conclusions reached by these judges and determine the law and the fact of this case as by the Constitution of this State they are empowered to do.” Evidence taken in connection with the suggestion showed that the opinion of the three judges who sat in the Gillespie and Dickey cases was published in the daily papers of Baltimore City. At the conclusion of that evidence the court overruled the suggestion for removal, and a judge who1 had not partid ⁷⁶ pated at the trial of Gillespie and Dickey was assigned to- try the case. That every one charged with a crime -against the laws of this State has the absolute and unqualified right to have his case heard by a fair and impartial jury is not to be- doubted, and that that right is o-ne of the most valuable privileges guaranteed to the citizen by the constitution of this State is not to be questioned. That it would be denied by requiring such a person to submit his case to a jury which felt constrained to- decide it in accordance with the judgment of some other tribunal or for any reason except what was found in the law and the facts of the case before them is just as clear.

Such a procedure would be ghastly mockery of the law, for obviously no jury could be regarded as fair or impartial which, "before it-’ had heard the evidence, felt bound by the deoi-si-o-n of some other tribunal to- convict the defendant. But we find no such condition in this case. If the traverser’s contention is sound, then in nearly every, case in which two or more persons -are jointly indicted for the same joint offense, and where there is a severance for any reason, and one of the defendants has been tried and convicted, the untried case against the others must be removed as a matter of course, because all the judges -and all persons eligible for jury service in that jurisdiction would- be so much affected by -the conviction in the first case that they would be unable to fairly and impartially try the other cases. Such a contention in our opinion goes too far.

We do no-t'think that the fact that two persons, jointly indicted with him for the same conspiracy, were eo-nvicted of that crime by three judges of the Supreme Bench of Baltimore 'City, compels the conclusion that the traverser in this case could not secure a fair and impartial jury in that city, and we could not, therefore, say that the trial court in overruling this suggestion abused ■the discretion reposed in it, for, aside from the fact that Gillespie and Dickey were so convicted by the three judges of the Supreme Bench of Baltimore City and such inference as might be drawn from that fact, there was no testimony ⁷⁷ relating to the question at all. We cannot assume as a matter of law, as we are asked to do, that either judges or jurors will be influenced by considerations which under their official oaths they are bound to disregard. And the statements made by the jurors in this case tend tó confirm that view. Those statements were not, it is true, made in connection with the suggestion, but nevertheless they illustrate the danger of arbitrarily. approving such a proposition as that embodied in the defendant’s contention.

Before he was sworn in this case every juror on the panel expressly denied that he would be influenced in rendering his verdict as to Newton by the verdict of the three judges, 'and stated affirmatively that his verdict would be based solely upon -the law and the evidence uninfluenced by the action of the three judges in the ease ■against Gillespie and Dickey. The suggestion was addressed 'to the sound judicial discretion of' the trial court, and, in the absence of anything in the record showing an abuse of that discretion, we would not be justified1 in reversing that court’s action upon it (Allers v. State, 144 Md. 75 ), and it is therefore affirmed. This brings us to tbe questions presented in the exceptions relating to the court’s rulings on questions of evidence and to certain remarks made by tbe judge who presided' at the trial, and by the State’s Attorney in the presence of the jury during the trial. Before considering these exceptions iu detail we will refer briefly to the issues in the ease material to the questions raised by thése exceptions.

Gillespie and Dickey bad audited tbe books of tbe Union Finance Company, and as a result of tbeir examination a letter signed “William A. Gillespie Company” was addressed to the Union Finance Company, in which the writer stated: “We find your company to be solvent and capable of meeting all obligations and contracts entered into with your clients. We further certify that your company purchases and sells listed securities in large volume, and your inventory of securities at the market at thé close of ⁷⁸ business August 15, 1922, shows a substantial surplus over and .above your obligations.” The State charged in the indictment that those statements were false, so that -the issues were (1) was the Union E'inance Company solvent and capable of meeting all dblig-ations and contracts' entered into with its clients ? (2) did it buy and sell listed securities in large volume? and (3) did its inventory of securities “at the market” at dose of business August 15th, 1922, show a substantial surplus over and above its obligations? 'There were, of course, other issues-, such -as the 'existence of an intent to- cheat and defraud and whether there was a confederation as charged in the indictment, but those we 'have named were the controlling controverted issues in :'the case. In "connection with the first and third issues much of the testimony offered related ’to- the value of the common stock of the California Oil Mining Corporation.

It had been bought at twenty cents a share, but Gillespie and Dickey, relying upon a letter from the Prudential -Securities Corporation offering fifty cents a share for it, valued it at that price. The State’s theory was that that letter was a collusive device written for the purpose of giving a ficititio-us value to. the stock, and that the stock had no such value. James H. Harrington, an employee of Redmond & Company, brokers, testifying for’ the 'State, said that the trust 'had bought in all through that company listed securities amounting -to $318,324.54, and it appeared from other witnesses that its equity in the unsold balance of those securities in the hands of Redmond & 'Company,, with its other assets, was sufficient to cover the deposits made by customers of the trust which had not been withdrawn, amounting to $107,750, if the oil stock was really worth fifty cents -a share, and -the Jockey Club stock worth the price paid for it, and if money withdrawn by Newton from the fund amounting to- $5,450.02 was properly treated as an account receivable due the trust, and if an item of $12,895.25 paid to- solicitors as commissions for business was properly treated as organization ex ⁷⁹ pense 'and an asset. Harlan Johnson, an expert accountant, testifying for the State, said that on August 15th, valuing the oil stook at cost, the liabilities -of the trust exceeded its assets by $21,955.67.

But if that stock had appreciated thirty cents a share in value it would have been worth $4)1,-400 more than the valuation placed1 upon it 'by that witness. It is apparent, therefore, that the value of the oil stock was of vital importance to the defendant, because if it was actually worth the price at which it was valued in the Gillespie audit, the trust was solvent according to the audit of the State’s own expert. The only testimony offered- by the State as to the value of this stock was that of the witness Johnson referred to above, who in his audit placed it -at cost because he had no idea what its value was, and who- said that he could not learn it from the brokers he consulted, because it was-an unlisted stook; that is, it was not listed -on ’any stock exchange. Eoa* -the purpose of showing its value, the defendant attempted to prove by competent witnesses the nature -of its business, the value of its property, the. price at .which its stock sold and the reasons why its stock could have been worth fifty cents a share on August 15th, and -only twenty cents a share when purchased about a month before, in a series of questions which are involved in exceptions numbered fifty; one to fifty-nine, and sixty-four to seventy.

Bternard Makeover, wbo appeared to be a responsible business man .of Bjaltimore, after testifying that be was the president of the oh company, was -asked to give its history, -the .nature.-of its business, the price at which it had disposed of its stock prior to August 15th, 1922, whether prior to that date any of its stock had been sold, whether on that date fifty cents a share was a fair valuation of its stock, whether he was familiar with its affairs, whether.he had seen its property and whether it was a going concern. Robert V. White, a director of the oil company, owning 36,000 shares of its stock, after testify; ing that he had heard of a great m-any sales of its stock,,bptween June 16th .and August 15th, was asked whether it. was ⁸⁰ ■worth fifty Gents a share on August 15th, 1922; what changes took place in the oil company between June 16th and August T5th with which he was familiar, which could have affected the value of the stock, what additional money was put into the corporation, how much money to his knowledge had been expended up to' August 15 th in developing its business, and whether there was any difference between the value of the stock on June 16th and its value on August 15th. None of these questions was allowed, and while some of the information sought to he elicited by them was afterwards admitted, in our opinion there was injurious error in the rulings of the court as to the quéstions involved in several of these excep>tions. Some of the questions were leading, and were for that reason objectionable, hut others which the court refused to allow.were in proper form and relevant to the issues in the case..., Indeed, it is rather difficult to see upon what theory the objection to them was sustained. ¡ .

The ¡contention of the State appears to be that no evidence as to the value of the stock Was relevant at all, because it was ■unlisted stock and ipso facto had no market, and that, having ■proved that it was unlisted, there arose an irrebuttable presumption that if had no value “.at the market,” because in ’the" Gillespie letter the writer certified that the securities owned by the trust “at the market” exceeded its liabilities. But that position is untenable for several reasons: First, because it is charged in the indictment that the statement in the letter that the trust was solvent and capable of meeting 'all obligations entered into with its clients was false. Obviously the defendant was entitled to meet that charge, if he could, by showing that the market value of the trust’s assets did enable it to meet those obligations. And if there was no such current open market for the oil stock forming part of its assets as there would be for a listed stock, it was permissible to resort to such evidence as would tend to show its ■actual value as rejecting upon its market value; second, because even- in connection with the ascertainment of its value at.the market.it'Was-permissible to show, the nature and char ⁸¹ aoter of the property to which such value related, and that term did not as a matter of law carry the implication that the securities referred to were listed or that they had 'an immediate market, and third, the term “at the market” in the ■case of an unlisted stock did not necessarily mean that the market referred to meant the stock exchange market, or daily quotations, for it could not be assumed as a matter of law that because it was unlisted it had no market value, since property may have a market value though it is not fluid and ■cannot be instantly exchanged. 'The expression “at the market,” as used in the letter, postulates two things, one that there is a market for the securities, and two, that in that market they had the value given them.

Applied to an unlisted stock, in ordinary usage the term would naturally he ■understood to mean the price for which the stock could be sold through the exercise of reasonable diligence and within a reasonable time by an owner who desired but was not compelled to sell it. And when it is considered that in the certificates of deposit given the depositors they were notified that the money deposited by them was to be used for participation in “syndicates, poods etc.,” it cannot be assumed as a matter of law that the words “your inventory of securities M the market exceeds your liabilities” as used in -the letter was equivalent to saying “you have listed securities which at the market exceed your liabilities,” or that they meant anything more than saying “the market value of your securities is in excess >of your liabilities,” .and that is the construction given it by the State in its ‘brief. And while the term “value .at the market” carries the implication that there is a market, it does not necessarily mean an instant or immediate market in which that price may be had, but that the .thing possesses such qualities that it may by the exercise of ordinary diligence he sold at that price. On the part of the 'State the only affirmative .and direct testimony concerning the value of the oil stock was that .of Mr. Johnson, who, after having said that he consulted two brokerage firms as to the value of the stock, summarized the result of his investigations as follows: ⁸² “In making the statement that the Union Finance Company was insolvent, I was governed entirely by the amount of the assets and the amount of the liabilities.

I do. not know what the California Oil Mining stock was worth on August 15th. I could not find the value, and I -started it at cost. Subject to the examination of the California Oil Mining stock and the Mexican Jockey Club stock it might very well be that the-Union Finance Company was entirely solvent on August 15th.” Under such circumstances it was permissible to show that the stock did have a market value, even though it was-not a listed stock, through such testimony as that offered by the defendants and referred to- in these exceptions. In 22 C. J, 186 it is said: “Where corporate stock is not listed on any exchange and has no regular market value, evidence of t'he value of the assets of the corporation and its indebtedness, liabilities or insolvency is admissible to show the value of the stock; o-r such value may be determined by ascertaining the nature, amount and permanency of the business done by the corporation; the dividends paid, the control of the stock, the management, the market for articles sold, if the business is a commercial one, and -other circumstances-of like nature legitimately hearing' upon the questions of value a-nd income.” These principles we think are generally recognized as- sound and have been applied to an infinite variety of facts and circumstances.

In -Jones on Evidencex par. 169, it is said: “The market price of a commodity is a conclusion which is largely made up of presumptions, and may always- be proved by -the opinions of witnesses based of' necessity, in part, at least, o-n hearsay. If there is no mare ket, then the actual value may be proved, as for instance by w'hat it is sold for in a bona fide -transaction. Where an aav tide in question has a, market- value, such value is usually taken as the actual value of such article. The proof of valuéis generally by the judgment or opinion of witnesses.

If theartide has no market value, its value may be shown by proof of such elements or facts-' affecting ,tbe question as may exist-. Recourse may be had to the items of cost, and its utility and ⁸³ use.” And to the same effect is Meyer v. State, 137 Md. 491, Words and Phrases (2nd Series), “market value.” It is said in Milwaukee Trust Company v. Milwaukee, 151 Wis. 224 : “The word value stands as one of the most difficult and elusive mental concepts and1 the ascertainment of what is called ‘market value’ in a case there is no open market recording numerous transactions of sale or barter and responding automatically to the relative quantities of demand and supply, is still more difficult *** Eor these reasons in all inquiries relating to value, where there is no known regular and continuous market such as exists in the exchanges or such 'as exists generally for consumption of goods a wide range of investigation is permitted and the rules governing the admission of evidence are liberal. * * *” Applying these principles to the facts of this case, in our opinion the questions involved in exceptions fifty-one to fifty-eight, inclusive, and in the sixty-fifth .and sixty-seventh exceptions should have been allowed. We find no error in the rulings as to 'the remaining questions involved in this series of exceptions because of their form. Hailan Johnson, a public accountant on the staff of Has-kins & 'Sells, produced on behalf of the 'State, testified that he had examined the books and papers of the Union Finance Company and Emory M. Newton, and gave in some detail the results of Ms examination of the books of account, stock, inventories, .etc., 'but did not testify as to the terms of any contracts between the trust and its Clients.

He -Was then asked this question:- “Tell the court and the jury whether the books of Newton, trading as The .Union Finance Company, showed that company to be capable of meeting all obligations and contracts as of August 15th, 1922” ? The witness was allowed, over objection, to- 'answer this question and said: “I would .say, no'. The books of the Union Finance Company show that they were not capable of meeting their liabilities on August 15 th. According to these books I found a difference or a loss of $21,955.69.” This ruling is the subject of the twenty-seventh exception. ⁸⁴ Allen O. Stehl, an accountant in 'Gillespie’s employ, offered, as a witness for the defendant, 'after testifying that he had examined the original audit and balance sheet, the working-audit and the books on which they were based, and -after testifying concerning various items in the audit, was asked t “Did you find in -the making'of that audit whether or not all of the receipts of Newton were properly and fairly accounted for on his books?” An objection to- that question was sustained because it -submitted -a question of law to- the witness, and we find no- reversible error in that ruling, which is the subject of the seventy-second exception.

But manifestly if the question asked Stehl was objectionable because it asked the