People v. Connolly

• Decision Date: 06 May 1930
• Citation: 253 N.Y. 330,171 N.E. 393
• Parties: PEOPLE v. CONNOLLY et al.
• Court: New York Court of Appeals Court of Appeals

253 N.Y. 330

171 N.E. 393

PEOPLE

v.CONNOLLY et al.

Court of Appeals of New York.

May 6, 1930.

Maurice E. Connolly and another were convicted of the crime of conspiracy to cheat and defraud, affirmed by the Appellate Division, (227 App. Div. 167, 237 N. Y. S. 303), and they appeal by permission.

Affirmed.Appeal from Supreme Court, Appellate Division, Second Department.

Max D. Steuer and Ben Herzberg, both of New York City, for appellant Connolly.

John J. Curtin, Wesley S. Sawyer, and Joseph R. Jackson, all of New York City, for appellant Seely.

Hamilton Ward, Atty. Gen. (Emory R. Buckner, John M. Harlan, and Herman T. Stichman, all of New York City, of counsel), for the People.

HUBBS, J.

The defendants, Connolly and Seely, have been convicted of the crime of conspiracy, in violation of subdivision 4 of section 580 of the Penal Law, which makes it a misdemeanor for two or more persons to conspire ‘to cheat and defraud another out of property, by any means which are in themselves criminal, or which, if executed, would amount to a cheat, or to obtain money or any other property by false pretenses.’ At the time of the alleged conspiracy, Connolly was borough president of the borough of Queens, city of New York. Seely was an assistant engineer of the borough of Queens. Clifford B. Moore was a consulting engineer in the engineering department of the borough, and John M. Phillips was a dealer in sewer pipe, engaged in selling precast lock-joint sewer pipe. The people's case was based upon the claim that the defendants, Connolly and Seely, conspired with Moore, who was not indicted, and Phillips, who was indicted but died before trial, to so manipulate the advertisements for bids for contracts to construct sewers that the bidders were compelled to use the particular kind of pipe sold by Phillips, and that thereby Phillips was enabled to charge exorbitant prices for such pipe, and thus obtained a monopoly of the sale of pipe to contractors in the brough of Queens; the result being that the city let contracts for sewers at prices far in excess of the fair and reasonable cost of the same. It was charged that the defendant Seely so drafted the specifications for sewers that bidders for contracts were practically compelled to use the special kind of pipe sold by Phillips, and that Moore furnished to Connolly written advices which, upon the face of the writings, justified Connolly in signing the contracts let at exorbitant prices. It was charged that, as a result of such conspiracy, Phillips received over $3,000,000 for pipe in excess of an amount which would have been, a fair and reasonable price for such pipe, and that the city paid to contractors for sewers that amount over which it would have been obliged to pay if it had not been for such conspiracy. It was also charged that in certain instances the lowest bidder for certain sewer contracts had put in a bid in opposition to the wishes of Phillips and with an intent not to use his pipe, and that it thouse instances, as a result of the conspiracy, the low bids were rejected by Connolly and thrown out. He, as borough president, had authority to reject a bid and to readvertise for new bids. In all such instances, where a low bid was rejected and the contract readvertised, one of Phillips' friendly contractors was the lowest bidder and received the contract.

In all cases where a new sewer was to be constructed, and before advertisements for bids for contracts to construct were published, the engineering department made a carefully prepared estimate of its fair cost. The contracts in question were let at a very much higher cost to the city than the engineers' estimates called for. In some instances contracts were let at twice the estimated cost. In certain cases the increased cost was measured approximately by the difference between the amount which the contractor was obliged to pay Phillips for the pipe used, and what would have been a fair price for it. In most cases the contractors were obliged to pay Phillips from five to ten times the fair value of the pipe used. As a result, the city over $3,000,000 more for the construction of the sewers in question than it would have paid if the contractors could have purchased the pipe at a fair price or if the specifications for pipe had been fairly drawn so that the contractors could have used different kinds of pipe.

In our opinion there can be no reasonable question that the evidence established a prima facie case of the existence of the conspiracy charged.

Upon this appeal, no question is raised by the defendant Connolly that the evidence did not establish a prima facie case of the existence of a conspiracy between Phillips and himself. The defendant Seely does urge that a prima facie case was not established against him.

No useful purpose would be accomplished by a detailed recital of the evidence which leads us to the almost irresistible conclusion that the guilt of both defendants was established beyond a reasonable doubt. The prevailing opinions delivered in the Appellate Division discuss the evidence in detail. With the conclusion reached in that court as to the facts we are full accord.

It is urged that the admission of certain evidence over the objection and exception of the defendants constituted error which requires the reversal of the judgment. Connolly's bank account was received in evidence, and testimony was also received tending to establish the fact that during the years 1925, 1926, and 1927 he was in possession of and used over $145,000 in currency in excess of the amount of his salary, and that none of that money passed through his bank accounts. It is agrued that such evidence was erroneously received. In considering the question of the legality of the receipt of such evidence, it must be borne in mind that the defendant Connolly concedes that the people's evidence established a prima facie case of conspiracy between him and Phillips. The evidence tended to establish that during a period of less than three years he used in currency over $145,000 in purchasing real estate, making loans, buying mortgages and paying his architects' fees. Twenty-three transactionswere involved, with fourteen different persons. The different transactions each involved the use of currency in amounts varying from $2,000 to $19,000. Real property mortgages were purchased for which he paid in currency $5,800, $6,500, $11,000, and $15,500 each, and he loaned in currency $15,000 on one occasion and $19,000 on another. Those unusual and extraordinary transactions took place during the periods when Phillips, his coconspirator, was defrauding the city of vast sums of money, by reason of contracts executed by Connolly as borough president, signed in some instances upon the written advice of Moore, his consulting engineer, and based upon specifications prepared by the defendant Seely in such a manner as to prevent fair, competitive bidding.

It is also contended that the evidence of Moore's bank account was improperly received. Moore was a consulting engineer. He was appointed as assistant engineer in 1904 at a salary of $1,650 per annum. He remained in the engineering department until after the time in question. His salary had been increased to $8,000 per annum, and he had been promoted to the position of consulting engineer. He made written recommendations to Connolly, in regard to the aceptance or rejection of bids for sewer contracts, and the signing of such contracts. Contracts in question were signed by Connolly upon Moore's written recommendation, in cases where Phillips' interest was involved, which contracts enabled Phillips to extort large sums from the contractors, thereby increasing the cost of the sewers to the city. He recommended the signing of contracts, the bids for which he must have known were much higher than the engineers' estimates, and grossly excessive in amount. The bids in question ran from approximately 50 per cent. to 100 per cent. higher than the engineers' estimates. He recommended the acceptance of bids put in by contractorsfavored by Phillips in cases where the bidders had never had any experience in sewer construction work, did not have any equipment to do the work, and had no financial responsibility. When such bidders received contracts, they promptly assigned them to parties recommended by Phillips, and received large sums for the assignments, and Phillips also received large sums for bringing about the assignments.

The witness Paulsen had received a contract, after agreeing with Phillips to use his pipe at an exorbitant price named by Philips. Trouble arose about the payment for the pipe. Paulsen desired to bid on another contract, but was notified by Phillips not to bid and informed that he could not get another contract. He disregarded Phillips' warning, and put in a bid, figuring the pipe at a much lower figure than he had agreed to pay Phillips for pipe for his existing contract, hoping to be able to make the pipe himself. His bid was about $150,000 lower than the next lowest bid. Paulsen was notified to appear at the engineers' office. He went and had a talk with Moore and the commissioner of public works in regard to the time when he could commence work on the first contract which had been awarded to him under an agreement to use Phillips' pipe. He testified that he told them that he would be ready to start work in July. That conversation was on May 27th. Moore wrote a letter to Connolly on June 22d, in which he referred to the conversation with Paulsen and wrote: ‘He stated * * * at that time that he would have all of the material on the job the following Tuesday and would start work in earnest inside of a week after that.’ In that letter he called attention to the fact that the second contract had not yet been let, and suggested, in effect, that it should not be, because Paulsen had not shown good faith in commencing the other contract as he had promised to do. The jury might...