People ex rel. Hegeman v. Corrigan

• Decision Date: 16 March 1909
• Citation: 87 N.E. 792,195 N.Y. 1
• Parties: PEOPLE ex rel. HEGEMAN v. CORRIGAN, City Magistrate, et al. (two cases).
• Court: New York Court of Appeals Court of Appeals

195 N.Y. 1

87 N.E. 792

PEOPLE ex rel. HEGEMAN

v.CORRIGAN, City Magistrate, et al. (two cases).

Court of Appeals of New York.

March 16, 1909.

Appeal from Supreme Court, Appellate Division, First Department.

Two separate proceedings by habeas corpus and certiorari, on the relation of John R. Hegeman, against Joseph E. Corrigan, city magistrate of the city of New York, and Peter Beery, a peace officer. From an order of the Appellate Division (129 App. Div. 62,113 N. Y. Supp. 504), reversing an order of the Special Term, which dismissed the writs, and remanded relator to custody on a charge of perjury, and from another order of said Appellate Division, affirming an order of the Special Term which discharged relator from arrest on a charge of forgery, the people appeal. First order reversed. Second order affirmed.

The charges of perjury and forgery are based on the same transactions, and, although the proceedings were separate, the two cases will be considered together in this opinion.

On February 19, 1908, a police officer laid before the defendant Corrigan, one of the city magistrates, an information upon oath charging the relator, upon information and belief, with the crimes of perjury and forgery, in that, being the president of the Metropolitan Life Insurance Company, he on the 26th of January, 1905, verified before a notary public a false report made to the superintendent of insurance, purporting to be an annual statement of the company's financial condition on December 31, 1904, in which he had stated, in substance, that the company had no loans secured by pledge of stocks and bonds or other collateral, whereas, in truth and in fact, as the relator then well knew, there was owing to the company the sum of $1,492,875 because of such loans. Also on the 3d day of January, 1905, the relator, as such president of the Metropolitan Life Insurance Company, with intent to defraud, did feloniously make and cause to be made a certain false entry in the cash book belonging to the company, and kept under his direction as president, certain entries of loans to individuals and corporations specifically mentioned aggregating the amount aforesaid, which entries were false, in that they purported to set forth and signify that the company had on that day made temporary loans to the persons mentioned and in the amounts indicated by the entries, whereas, in fact, no such loans had been made on that day, as the relator well knew. The information so presented to the magistrate was accompanied with depositions of a large number of persons, and the annual report made to the superintendent of insurance as to the financial condition of the company on the 31st day of December, 1904, together with copies of entries in books and of checks drawn and received by the company. Upon the information and depositions so presented to the magistrate he issued two warrants, one charging the relator with the crime of perjury and the other charging him with the crime of forgery, upon which he was arrested by the peace officer. Thereupon habeas corpus was sued out in his behalf and a writ of certiorari obtained in each case, bringing up for review the action of the magistrate upon the information and depositions so presented to him.

The substantial facts disclosed by the depositions are to the effect that the officers of the Metropolitan Life Insurance Company had for the last 15 years made loans secured by collateral in various amounts to different individuals, and that at the end of each year the loans so made and secured were turned over to the banking company of Vermilye & Co., who issued a check for the amount of such loans and delivered the same to the insurance company, which check was deposited to its credit, and that thereupon, and on the second or third day of the new year, the proceeding was reversed by the delivery by Vermilye & Co. of the notes representing the loans and the securities accompanying the same to the insurance company, which, in turn, would draw its check for the amount thereof and deliver the same to Vermilye & Co. On the 30th day of December, 1904, it appears that the insurance company had outstanding loans of the character described to the amount of $1,492,875, and on that date the relator sent to Vermilye & Co. a package containing notes and collaterals for such loans with a letter referring to other matters, but closing with the statement: ‘For the accompanying package please send us your check for $1,492,875. We will reverse this transaction according to understanding on Tuesday, January 3, 1905. Very truly yours, John R. Hegeman, President.’ This package was received by Vermilye & Co., and their check for that amount was returned and deposited to the credit of the insurance company. On the 3d day of January the relator inclosed a check of the insurance company to Vermilye & Co., with the following letter: ‘Gentlemen: Find herewith this company's check to your order for $1,492,875, for which return by bearer the securities delivered to you on the 31st ultimo.’ This was done, and on that date there was entered in the cash book a list of these loans showing the cash that had been paid out therefor. Thereafter the relator signed and verified the correctness of the report made by him as such president to the insurance department of the state in which the statement is made, to which we have already referred, to the effect that the insurance company had on the 31st day of December no loans outstanding secured by collateral.

There was also submitted to the magistrate at the time of the application for the warrant the affidavit of William A. Read, who was then a member of the firm of Vermilye & Co. and who had principal charge of the transactions in question. After setting forth in detail the letters that passed between the parties, he said: ‘I do not know that any examination was made of the sufficiency of these securities when they were transferred to Vermilye & Co. at the end of the year. I do not think that I ever directed any such examination to be made. I simply turned the matter over to the head of the bond department, or one of the partners, and said: ‘Mr. Hegeman has one of these year-end transactions. Fix it up and let him have the money.’ As a matter of fact Vermilye & Co. did not care at all what securities the Metropolitan Life transferred to them. If on December 31st Mr. Hegeman had handed me an envelope with a lot of brown paper in it, and had asked me for a $1,000,000 on it until the beginning of the next year, I should have given it to him if he had given me the note of the company with a lot of brown paper as collateral. In transferring these loans to Vermilye & Co. the Metropolitan Life usually accompanied the notes of the borrower by a letter which in substance represented to Vermilye & Co. that after the end of the year the Metropolitan Life would take back the same loans at the same price. Vermilye & Co. were not at that time in the market to purchase notes generally. What they did in the way of purchasing the Metropolitan collateral loans was done to oblige a very valued client, and they would probably not have bought the loans from the Metropolitan if they had not an understanding with Mr. Hegeman that after the end of the year the Metropolitan would purchase them back. During the time that Vermilye & Co. had the loans in their possession, they would not have been acting in an honorable way and in good faith if they had sold them to a third party because Vermilye & Co. had already resold them to the Metropolitan Life for delivery early in January. The sale to Vermilye & Co. and resale to Metropolitan Life were simultaneous. That was the understanding, although there was no expression of it beyond the letters from the Metropolitan Life to us.'

It further appeared by the deposition of the assistant cashier of the company that on the day after the return of the notes and collateral to the insurance company by Vermilye & Co. the company, by a separate check, paid to Vermilye & Co. the sum of $497.63, which was entered in the cash book: ‘Interest, temporary loan, V. & Co. $497.63’-evidently being interest on the amount advanced by Vermilye & Co. for the three days during which they held the loans.

Wm. Travers Jerome, Dist. Atty. (Robert C. Taylor, of counsel), for the People.

Morgan J. O'Brien, for respondent.

CULLEN, C. J. (after stating the facts as above).

The perjury with which the relator is charged is the verification under oath of a report to the insurance department of the state, in which, in answer to a question calling for a statement of the loans held by the company secured by the pledge of bonds, stock, or other collateral, it was stated that there were none. For the purpose of determining whether the evidence was sufficient to justify the magistrate in issuing a warrant, it becomes necessary to consider the rules of law applicable to the case. Section 96 of the Penal Code prescribes: ‘A person who swears or affirms that he will truly testify, declare, depose, or certify, or that any testimony, declaration, deposition, certificate, affidavit or other writing by him subscribed, is true, in an action, or a special proceeding, or upon any hearing, or inquiry, or on any occasion in which an oath is required by law, or is necessary for the prosecution or defense of a private right, or for the ends of public justice, or may lawfully be administered, and who in such action or proceeding, or on such hearing, inquiry or other occasion, wilfully, and knowingly testifies, declares, deposes, or certifies falsely, in any material matter, or states in his testimony, declaration, deposition, affidavit or certificate, any material matter to be true which he knows to be false, is guilty of perjury.’ Therefore, to constitute perjury, the false statement must be material. Section 44 of the insurance law (Laws 1892, p. 1952, c. 690) requires every corporation of the character of the ...