Mutscher v. State, s. 48160

• Decision Date: 24 September 1974
• Docket Number: Nos. 48160,s. 48160
• Parties: Gus F. MUTSCHER, Jr., Appellant, v. The STATE of Texas, Appellee. S. Rush McGINTY, Appellant, v. The STATE of Texas, Appellee. Thomas C. SHANNON, Appellant, v. The STATE of Texas, Appellee. to 48162.
• Court: Texas Court of Criminal Appeals

Page 905

514 S.W.2d 905

Gus F. MUTSCHER, Jr., Appellant, v. The STATE of Texas, Appellee.

S. Rush McGINTY, Appellant, v. The STATE of Texas, Appellee.

Thomas C. SHANNON, Appellant, v. The STATE of Texas, Appellee.

Nos. 48160 to 48162.

Court of Criminal Appeals of Texas.

Sept. 24, 1974.

Rehearing Denied Nov. 6, 1974.

Frank Maloney, Austin, Richard Haynes, Houston, Davis Scarborough, Abilene, for Mutscher.

A. L. Rhodes, Abilene, and W. James Kronzer, Houston, for McGinty.

Joe Shannon, Jr., Fort Worth, and Bob R. Hanna, Abilene, for Shannon.

Robert O. Smith, Dist. Atty. and Stephen H. Capelle, Asst. Dist. Atty., Austin, Ed Paynter, Dist. Atty., Patricia A. Elliott and Billy John Edwards, Asst. Dist. Attys., Abilene, and Jim D. Vollers, State's Atty., Austin, for the State.

OPINION

MORRISON, Judge.

The offense is conspiracy among two Members of the House of Representatives and a state employee to accept a bribe with the understanding that the two Members would use their vote, influence and powers of their office to procure and assist in the passage of certain legislation which thereafter would be brought before them in their official capacities, in violation of Article 159, Vernon's Ann.P.C. ¹; the punishment as to each appellant, five years probated.

The parties to the events which resulted in this prosecution were:

Gus F. Mutscher, Jr.,--Speaker of the Texas House of Representatives

Thomas C. Shannon--a sixteen year veteran of the Legislature

S. Rush McGinty--Executive Assistant to Speaker Mutscher

Gus F. Mutscher, Sr.--father of Speaker Mutscher

F. C. Schulte--Administrative Assistant to Speaker Mutscher

Frank W. Sharp--Chairman of the Board of Sharpstown Realty Company; Chairman of the Board of Sharpstown State Bank; Chairman of the Board of National Bankers Life Insurance Company Father Francis Kennelly--Jesuit priest and honorary director of Sharpstown State Bank

Joseph Novotny--Executive Vice President of Sharpstown Realty Company; President of Sharpstown State Bank.

Initially, appellants challenge the sufficiency of the evidence.

The State's theory of this case is that Mutscher heard of Sharp's interest in an individually licensed state banking insurance supplemental to or in lieu of Federal Deposit Insurance. Mutscher approached Sharp about buying into one of Sharp's enterprises (Bankers Life Insurance) on credit and at the same time dangled the bait of passing Sharp's pet deposit insurance bill. When Sharp responded to these advances, Mutscher then made it known to Sharp that he was not alone in this venture and needed the help of his fellow legislator Shannon.

In order to determine whether this theory has been supported by the evidence, we summarize from the testimony of several witnesses:

The witness Novotny described Sharp as 'probably a genius in many areas, but as far as terminology in the banking business, he didn't know the difference in an overdraft and a cash item.' He stated that Sharp owned Sharpstown Realty Company, National Bankers Life Insurance Company and a 'spin off' corporation, Master Control, and the Sharpstown Bank. He described Sharp as a braggadocious person who talked very much about his acquisitions. He stated that on one occasion Sharp predicted he would drain a swamp in Louisiana and build a city where the swamp had been, and mentioned other farfetched ideas such as building a city the size of Wichita Falls on his ranch near Junction. Another time Sharp discussed how he might acquire Braniff Airways and Royal Dutch Oil Company.

From other witnesses we learn that Sharp had given stock to the Jesuit Order and to such important personages as astronauts.

Sharp testified that prior to and at the time involved in this case, his bank, Sharpstown State Bank, was having trouble with the State Banking Department and the Federal Deposit Insurance Corporation, as they had been very critical of the loans of his bank. He was interested in getting his plan for bank deposit insurance adopted into law and frequently made this known to Mutscher in person and by letter. Soon thereafter they met privately in Houston at which time Mutscher told Sharp of some personal financial losses he had experienced in a 'Siboney' stock deal, and he 'dwelt on that considerably.'

We quote further from Sharp's testimony:

'And as I was leaving, he (Mutscher) said more or less in a by the way manner, 'How is National Bankers Life coming along'--and he made the remark that he might buy some of the stock himself.'

Two or three days later in a telephone conversation Mutscher informed Sharp he and his associates wanted to buy stock in National Bankers Life and asked permission for his father to buy some also. Mutscher told Sharp that in order to make the purchase, some sort of financing would be required. Sharp indicated to Mutscher that financing arrangements might be available through Sharpstown State Bank. Sharp later contacted Novotny, Sharpstown State Bank President, and gave his 'blessing' to the loans.

The purchases were soon thereafter effected with the purchasers executing notes which can only be described as unsecured notes, since they were accompanied only by appellants' financial statements as collateral. Prices paid for the stock by appellants ranged from 11 1/8 for Shannon and McGinty to 13 for Mutscher. The size of the loans obtained by these appellants and the unsecured nature of the loans have even more significance when viewed in the light of the extensive scrutiny the bank was under from several fronts.

The amount of the loans taken out by each appellant, the number of shares purchased, and subsequent profits are shown on Table One. ²

At Sharp's suggestion, the bank deposit insurance bills were then prepared and delivered to appellant Shannon at the House of Representatives. On September 9, the legislation passed and Mutscher called Sharp and told him of the passage of the bills. On September 10, Mutscher called Sharp and told him he wanted to sell the stock. The same day Sharp began to manufacture a market for the stock by getting in touch with Kennelly.

The Jesuits at this time held 20,000 shares of Sharpstown Bank stock which they wanted to sell for $50 per share. Sharp had advised the Jesuits that he would find a buyer for these shares and had further encouraged the Jesuits to invest the resulting million dollars in National Bankers Life stock. Father Kennelly's presence at the bank on September 11 was for the purpose of following through with this arrangement. ³

The sale by these appellants was made the next day, September 11. The price was $20 a share. ⁴

On September 10, Sharp realized that on the following day he had to be able to sell close to a million dollars in bank stock in order to pay off his political associates. ⁵

We now come to appellant Shannon's participation in the conspiracy. In one of the earlier meetings, Mutscher had told Sharp he was not very well versed in insurance matters himself, but had an associate who was well informed on such matters and before they moved any further he would need Shannon's opinion. When the bills were prepared, they were delivered to Shannon's office in the Capitol. Shannon presented the bills at the committee meeting and secured their approval by the committee. After leaving the committee meeting, Shannon, after being recognized by Mutscher on the floor of the House, got the bills passed by the House. Shannon was in Houston at Sharpstown State Bank on September 11, the payoff day for Sharp's political associates.

Appellant McGinty was in telephonic conversation with Sharp approximately once weekly for the first six months of 1969, just prior to the introduction and passage of the legislation, and he, like Shannon and Mutscher, bought, sold and reaped large profits from the stock transaction.

Each of the three appellants submitted financial statements which were not checked prior to the making of the loans. Novotny testified that each financial statement was so indefinitely drawn that it could not have been checked for validity without more details. No effort was made to secure such details.

In support of their contention that the evidence is insufficient to support this conviction, the appellants rely in part upon Norris v. State, 165 Tex.Cr.R. 38, 302 S.W.2d 135. The indictment in Norris, supra, named the County Judge and the Commissioners, saying that they conspired 'together with Raeburn Norris' to convert $5,000.00.

In Norris v. State, supra, we said:

'The county judge and one of the county commissioners named in the indictment, as defendants and parties to the conspiracy, were called as witnesses by the State and, after the prosecution against them had been dismissed by the State, testified in effect, that the commissioners court had never ordered the $5,000 warrant drawn and that the county was not, at the time, indebted to the San Diego State Bank in any amount.

'It is interesting to note that in the examination of these two witnesses, the State did not inquire of them if they had entered into the alleged conspiracy with him (the appellant), as the State had charged in this indictment against him.

'The fact that the witnesses did not attest the existence of the conspiracy, as the State charges in the indictment, is a strong circumstance that they would not so testify and therefore that there was no conspiracy as alleged.'

In the case at bar, as distinguished from the witnesses in Norris v. State, supra, Sharp was not named as a conspirator. It should be noted that the pleader was careful to allege that the agreement was among the three named appellants only for the purpose of soliciting from Sharp a bribe for which they would use their influence to secure the passage of the legislation.

When the appellants accepted their positions of trust, they were charged with the knowledge that the law prohibited them from certain types of conduct. A part of this prohibited conduct was that they might not enter...