Pennsylvania Turnpike Commission v. U.S. Fidelity & Guaranty Co.

• Decision Date: 11 October 1963
• Citation: 194 A.2d 423,412 Pa. 222
• Parties: PENNSYLVANIA TURNPIKE COMMISSION, Appellant, v. UNITED STATES FIDELITY AND GUARANTY COMPANY and James F. Torrance.
• Court: Pennsylvania Supreme Court

Page 423

194 A.2d 423

412 Pa. 222

PENNSYLVANIA TURNPIKE COMMISSION, Appellant, v. UNITED STATES FIDELITY AND GUARANTY COMPANY and James F. Torrance.

Supreme Court of Pennsylvania.

Oct. 11, 1963.

The lower court made the following conclusions: (1) That the criminal judgments of conviction were prima facie evidence only of the defendant's liability on the bonds involved; (2) That the bonds were penal or forfeiture in nature; (3) That if the criminal judgments were conclusive of a breach of the bonds, it could only be as to the bond which Torrance executed as commissioner for the period of August 14, 1954, to August 14, 1955.

IMPORT OF THE CRIMINAL JUDGMENTS

The rule in most jurisdictions is that a judgment entered in a criminal case is not proof of anything in a subsequent civil action growing out of the same facts, except the fact of its rendition. See 50 C.J.S. Judgments § 754; 30A Am.Jur., Judgments § 472 and 2 Freeman, Judgments, § 653 (5th ed. 1925). The rule is a carry over from the early days of the common law. See 18 A.L.R.2d 1287. With the lapse of time, it has been recognized that the reasons for the rule are weak and outdated. A growing minority would admit the criminal record as evidence of the facts determined in the criminal proceeding unless it is excluded by statute. See, Development in the Law, Res Judicata, 65 Harvard L.Rev. 818 (1952); Schindler v. Royal Ins. Co., 258 N.Y. 310, 179 N.E. 711, 80 A.L.R. 1142 (1932), and 18 A.L.R.2d 1287 and 1289. The federal courts have now adopted a progressive view and hold that the issues essential to a guilty verdict must be regarded as having been determined by the judgment. See, Local 167 of International Brotherhood of Teamsters, etc. v. United States, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed. 804 (1934); United States v. Gramling, 180 F.2d 498 (5th Cir., 1950); United States v. Salvatore, D.C., 140 F.Supp. 470 (1956); United States v. Doman, 255 F.2d 865 (3 Cir., 1958) aff'd 359 U.S. 309, 79 S.Ct. 755, 3 L.Ed.2d 828 (1959).

In the case of a judgment of acquittal or nolle prosequi, Pennsylvania has consistently followed the rule that the criminal judgment is not admissible as evidence to prove that the defendant did not do the act complained plained of: Commonwealth v. Funk, 323 Pa. 390, 186 A. 65 (1936); Wilson v. Wilson, 100 Pa.Super. 451 (1931); Bobereski, Adm'r v. Insurance Co. of Pa., 105 Pa.Super. 585, 161 A. 412 (1932). It has likewise been held that in a civil action to recover damages for an assault and battery, the record of the defendant's conviction in a criminal court of the assault and battery is not admissible: Nowak v. Orange, 349 Pa. 217, 36 A.2d 781 (1944); Zubrod v. Kuhn, 357 Pa. 200, 53 A.2d 604 (1947). However, in Mineo v. Eureka Security Fire & Marine Ins. Co., 182 Pa.Super. 75, 125 A.2d 612 (1956), it was held that the named insured in a fire insurance policy or his assignee was conclusively barred from recovery on the policy by the conviction of the insured on the charge of arson. Also, it has been held that a person convicted of murder cannot take as beneficiary under an insurance contract on the life of the victim. See, In re Greifer's Estate, 333 Pa. 278, 5 A.2d 118 (1939). Of course, it must be recognized that Mineo and Greifer's involved a question of public policy and an attempt to take advantage of a right arising from the crime itself.

In view of the substantial difference in the quantum of proof required in civil and criminal cases, the rule of exclusion in cases wherein a judgment of acquittal is entered is rational and well grounded. However, there are exceptions. (See Wigmore, Evidence, § 1671; 3d ed. 1940).

The question of the involvement of Torrance, the principal on the bonds, in a conspiracy It was abundantly established that Torrance's acts constituted a breach of the conditions of the bond. In view of the particular circumstances in this case and the detailed evidence adduced in the trial on the very conditions involved in the bond, it would be an act of supererogation to re-try the question of the activities which spelled out the breach of the bond. For the purpose of this present case, we therefore conclude, that the breach of the conditions of the bonds has been established.

to defraud and misbehavior in office, was thoroughly explored in a long and well conducted trial. The convictions which followed necessarily establish that Torrance participated in a conspiracy to defraud the commission, and that he wilfully permitted payment of vast sums of money to Manu-Mine to which it was not entitled.

Fidelity's argument that it was not a party to the criminal proceeding and has not had its day in court fails because, as already indicated, the very circumstances which went into the scope of the bonds were exhaustively and conclusively litigated. The surety is bound by the determination of the principal's liability. See, Commonwealth v. Fidelity & Deposit Co., 224 Pa. 95, 73 A. 327 (1909); Commonwealth, to Use of Ulshofer v. Turner, Exrx., 340 Pa. 468, 17 A.2d 352 (1941). We see no substantial reason why this rule should not be applied herein. Fidelity submitted itself to the acts of Torrance and the criminal judgments follow the scope of the suretyship. It must be noted that fraud, collusion or mistake are not pleaded. See 43 Am.Jur., Public Officers, § 453. If Torrance has no defense as to the issue of breach, then no such defense is open to his surety.

Nor does the fact that the commission was not a party to the criminal proceeding preclude the application of the doctrine of collateral estoppel. The commission is an instrumentality of the Commonwealth: Rader v. Pennsylvania Turnpike Commission, 407 Pa. 609, 182 A.2d 199 (1962). This is sufficient nexus to justify the application of the rule.

Fidelity further asserts that the criminal judgments do not or did not establish: (1) That there had been any breach of either of the two bonds covering the individual defendant in the capacity of secretary-treasurer of the commission; (2) That any breach had occurred in the period after August 15, 1955, to which the second set of bonds relate.

The conspiracy indictment charged that the conspiracy was pursued on February 28, 1955, and 'divers and other dates prior thereto' and the misbehavior indictment charged that the misbehavior occurred on February 28, 1955, and 'divers other times prior to and subsequent to that date.' The evidence disclosed that Torrance authorized the issuance of the first check to Manu-Mine on May 19, 1955, and a last check on January 20, 1956. When a conspiracy is shown, the acts of any conspirator done in its prosecution and furtherance are admissible against any or all of the conspirators: Commonwealth v. Rhey, 140 Pa.Super. 340, 14 A.2d 192 (1940). Herein each payment made under the contract must be considered part of the conspiracy. Since payments were made under the contract during the period covered by each of the bonds, the conspiracy conviction is evidence of a violation of the condition of each bond.

The contention that the conviction does not extend to Torrance in his capacity as secretary-treasurer of the Pennsylvania Turnpike Commission is also without merit. In his capacity as secretary-treasurer, Torrance signed checks under the contract for enormous amounts of money. These payments, as previously indicated, were part and parcel of the conspiracy, and were made during the periods covered by the bonds executed to cover Torrance in his capacity as secretary-treasurer. The conspiracy indictment was brought against Torrance, both as secretary-treasurer and commissioner of the commission. The conviction

on this indictment is, therefore, evidence applicable to Torrance in both capacities.

NATURE OF THE BONDS

It is our conclusion that the bonds were indemnifying, rather than penal or forfeiture...