Com. v. Beneficial Finance Co.

Citation360 Mass. 188,275 N.E.2d 33
Parties, 52 A.L.R.3d 1143 COMMONWEALTH v. BENEFICIAL FINANCE CO. et al.
Decision Date04 November 1971
CourtUnited States State Supreme Judicial Court of Massachusetts

Raymond W. Bergan, Virginia, and Edward B. Hanify, Boston (Thomas M. Joyce and Francis X. Hanlon, Boston, with them), for Household Finance Corp.; Walter J. Hurley, Boston, for Nathaniel W. Barber, was also with them and submitted a brief.

Edward O. Proctor, Boston (George J. Leary and Daniel B. Bickford, Boston, with him), for Beneficial Finance Co.

Daniel F. Featherston, Jr., Boston, for Liberty Loan Corp.

Lawrence R. Cohen, Boston (Newton H. Levee, Boston, with him), for Local Finance Corp.

James W. Kelleher, Boston (William C. Madden and Daniel H. Kelleher, Boston, with him), for Francis T. Glynn and others.

Francis J. DiMento, Boston, for James S. Pratt.

Robert V. Mulkern, Worcester, for Lyle S. Woodcock.

Robert F. Muse, Boston, for Martin J. Hanley, and Martin J. Hanley, pro se.

John J. Curtin, Jr., William G. Young and Henry S. Healy, Sp. Asst. Attys. Gen. (Ruth I. Abrams, Asst. Atty. Gen., with them), for the Commonwealth.


SPIEGEL, Justice.

We have before us appeals emanating from 2 separate series of indictments and 2 separate jury trials of various individual and corporate defendants.

All of these appeals were taken under G.L. c. 278, §§ 33A--33G, and are before us because of the convictions of a number of individuals and corporations. The corporations convicted in the first trial were Beneficial Finance Company (Beneficial), Household Finance Corporation (Household) and Liberty Loan Corporation (Liberty). The individuals convicted in the first trial were John M. Farrell, Francis T. Glynn, Nathaniel W. Barber, James S. Pratt, Lyle S. Woodcock, Morris Garfinkle and Martin J. Hanley. In the second trial the corporate defendants convicted were Beneficial, Household and Local Finance Corporation (Local). The individuals convicted in the second trial were Hanley, Farrell, Glynn, Barber, Pratt and Edward R. Newhall.

These cases have become generally known as the 'small loans' cases. In each case the defendants were charged with various offences under numerous indictments returned in 1964 by a special grand jury. The offences charged were offering or paying, or soliciting or receiving, bribes, or conspiring to do so. 1 These indictments were presented to the special grand jury as a result of an investigation developed by the Massachusetts Crime Commission (Commission). The Commission was specifically created by the Legislature 'to investigate and study as a basis for legislative action the existence and extent of organized crime within the Commonwealth and corrupt practices in government at state and local levels.' Resolves of 1962, c. 146, approved July 27, 1962.

Some insight into the sheer detail involved in reviewing the proceedings may be gleaned from the fact that '(p)retrial motions on these indictments were heard for sixty-five court days ending May 9, 1966. The transcript of the pre-trial proceedings covers 4,730 pages. The decisions disposing of the various motions cover almost 700 pages. * * * (After hearing the judge made extensive findings and rulings on the pre-trial motions.) Forty-nine of the indictments were grouped for (the first) trial which began on July 18, 1966. The trial lasted about five months and generated a voluminous record.' See Barber v. Commonwealth, 353 Mass. 236, 237--238, 230 N.E.2d 817. The transcript of evidence consists of 103 volumes containing more than 7,500 pages.

The evidence in the first trial, pertinent portions of which we summarize in detail later in this opinion, is here synopsized. This evidence tends to show that during the year 1962, several licensed small loans companies (corporate defendants), together with certain of their officers and employees (some of whom are defendants), conspired to bribe Hanley and Garfinkle in their capacities as public officials. The purpose of the alleged conspiracy and the payment of the bribe money was to insure the maintenance of a maximum interest rate which companies licensed to do business in the Commonwealth were permitted to charge. Hearings on this matter were conducted by the Small Loans Regulatory Board (Rate Board) in 1962 and the bribe money allegedly paid to Hanley was intended to 'fix' the results of these hearings.

The second trial began on July 17, 1967, and required 222 trial days (over a period of about 12 months). Twenty-one of the indictments were grouped for the trial. The transcript of this trial consists of 223 volumes containing more than 11,800 pages. Collectively (pre-trial and both cases), the defendants took more than 5,400 exceptions and assign about 700 numbered multiple assignments of error. The findings, rulings and decisions of the judge (covering all proceedings) contain more than 1,400 printed pages.

The evidence in the second trial, set out in detail in the subsequent portion of this opinion, tends to show that over a period of some 7 years (1957--1963) a number of small loans companies (including the corporate defendants), together with a number of their officers and employees (including the individual defendants named in the conspiracy indictment), allegedly conspired to bribe Hanley. His office as a public official clothed him with extensive powers to approve or disapprove the activities of small loans companies doing business in the Commonwealth. The bribes were alleged to have been paid to Hanley over this period to induce Hanley (1) to approve various requests pertaining to routine matters; (2) to refrain from taking action adverse to certain of the defendants and co-conspirators at rate hearings held during 1957; and (3) to obtain approval of various changes in small loans regulations.

Although these cases were argued consecutively, some of the issues involved necessarily overlapped. The pre-trial issues in both cases were argued jointly. In the interest of lucidity and conciseness this opinion consists of 3 parts.

First, we treat with the pre-trial issues raised by all or some of the defendants whether in the first or second trials. Subsequently we deal with specific issues raised in the first trial and finally with issues raised during the second trial. 2

Prior to dealing with the issues involved in these appeals, we believe it to be opportune and fitting to make some general observations.

Many of the exceptions are but conglomerate fragments which are obviously of little, if any, merit but in any event are not worthy of discussion and would merely serve to needlessly clutter this opinion. Others present a facade of substantial issues, but when considered in depth, present no problem requiring our comment. Others may show some technical error but are, at best, harmless. We have endeavored to consider and to give scrupulous attention to every assignment of error argued by the defendants. If some assignment of error is not specifically referred to in this opinion, a conclusion that we did not reflect on it would be far from accurate. We recognize the formidable task facing defendants' counsel, as well as the prosecution, in arguing these appeals. We commend counsel for the defendants, as well as counsel for the Commonwealth, for the excellence of their briefs and their obvious devotion to the task confronting them. The briefs filed and the oral arguments of counsel were noteworthy and of valuable assistance to us in the writing of this opinion.

In the case of Barber v. Commonwealth, 353 Mass. 236, 239, 230 N.E.2d 817, we indicated that defendants' counsel were vigilant throughout a lengthy first trial in their efforts to protect the rights of the defendants. This has been equally true throughout the second trial. However, it should be borne in mind that although 'a defendant is entitled to a fair trial, he is not guaranteed a perfect one. Root v. Cunningham, 344 F.2d 1, 3 (4th Cir.). Johns v. Smyth, 176 F.Supp. 949, 952 (E.D. Va.).' Barber v. Commonwealth, supra, at 240, 230 N.E.2d at 820.



All but two of the pre-trial issues raised have been argued extensively by Household. The other defendants in many instances confined their arguments to an adoption of Household's. For this reason, these issues may be most efficiently dealt with by treating with them as argued by Household, listing for each issue the other defendants who have adopted Household's argument on the specific issue. We deal finally with the pre-trial issues which have been raised separately by other defendants and which are not covered in the Household brief.

Household raises 3 issues attacking the validity of the indictments because of the various aspects of the method by which evidence was presented to the special grand jury.

1. The first of these is the allegation that '(t)he indictments were invalid because legislative agents, paid by legislative funds, utilized a legislative investigation to prepare and develop a case for presentation to the special grand jury and then presented that case in violation of (art. 30 of) the Declaration of Rights.' Beneficial, Liberty, Local, Barber, Pratt, Glynn, Farrell, Woodcock and Newhall have all adopted Household's argument on this point. It was raised in the pre-trial proceedings by motions to dismiss filed by 6 corporate defendants. The judge heard 17 witnesses and admitted in evidence 26 exhibits relative thereto. He made extensive findings of fact and rulings of law and denied the various motions.

First, Household argues that at the time of its investigation into the small loans companies the Commission was preoccupied with law enforcement rather than remedial legislation to an extent that was in derogation of art. 30 and its mandate 'to investigate and study as a basis for legislative action' (emphasis supplied). This objection was raised in the case of Gardner v....

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