People v. Paisley

• Decision Date: 08 December 1921
• Docket Number: No. 13921.,13921.
• Citation: 132 N.E. 822,299 Ill. 576
• Parties: PEOPLE v. PAISLEY et al.
• Court: Illinois Supreme Court

299 Ill. 576

132 N.E. 822

PEOPLE

v.PAISLEY et al.

No. 13921.

Supreme Court of Illinois.

Oct. 22, 1921.

Rehearing Denied Dec. 8, 1921.

Error to Appellate Court, First District, on Error to Criminal Court, Cook County; Oscar Hebel, Judge.

William H. Paisley, Oliver F. Paisley, and James T. Paisley were convicted of unlawfully receiving bank deposits, knowing themselves to be insolvent (220 Ill. App. 460), and bring error.

Affirmed.William Friedman and Marshall Solberg, both of Chicago (Colin C. H. Fyffe and David R. Clarke, both of Chicago, of counsel), for plaintiffs in error.

Edward J. Brundage, Atty. Gen., Robert E. Crowe, State's Atty., of Chicago, and Edward C. Fitch, Asst. Atty. Gen. (Edwin J. Rabex and Edward E. Wilson, both of Chicago, of counsel), for the People.

THOMPSON, J.

In 1908 plaintiffs in error, William H. Paisley, Oliver F. Paisley, and James T. Paisley, opened a private bank at 5545 Broadway, in the city of Chicago, under the name of Edgewater Bank, which was conducted as a private bank until April 11, 1914, when it was changed into a state bank, known as Edgewater State Bank. Shortly after this it moved to new quarters at 4613 Broadway. Plaintiffs in error controlled this bank until December of the same year, when they were forced by the state auditor to surrender control to other parties. In the meantime plaintiffs in error had organized a second private bank at 5302 North Clark street under the name of Summerdale Savings Bank. July 1, 1915, they opened another private bank at the location of the old Edgewater Bank, at 5545 Broadway, under the name of North Shore Savings Bank. In August, 1916, they opened another private bank at the corner of Broadway and Grace street, which they styled the Grace Street branch of the North Shore Savings Bank. September 19, 1916, six weeks after the opening of their last bank, plaintiffs in error voluntarily closed their doors and filed a bill in the superior court of Cook county for the appointment of a receiver. In October, 1916, the grand jury returned a number of indictments charging plaintiffs in error with unlawfully receiving deposits in these banks, knowing themselves to be insolvent. They were tried and convicted of unlawfully receiving a deposit of $700 from Mrs. Margaret Basch. This judgment was reversed for errors arising on the trial and the cause remanded for a new trial. People v. Paisley, 288 Ill. 310, 123 N. E. 573. The judgment brought before us for review by this writ of error is upon the conviction in the criminal court of Cook county for unlawfully receiving a deposit of $90 from Elsa Koch. Plaintiff in error William H. Paisley was sentenced to pay a fine of $180, and the other two plaintiffs in error were each sentenced to the penitentiary and to pay a fine of $180. The judgment of the criminal court has been affirmed by the Appellate Court for the First District.

When the crash came the total assets of the partnership, William H. Paisley & Sons, was $70,955.63, and the individual assets of William H. Paisley were $470.79, of Oliver F. Paisley $803.21, and of James T. Paisley $1,428.92, making a grand total of all available assets of $73,658.55. The total liabilities were $498,095.31, of which there was due depositors $256,345.13. Plaintiffs in error had juggled figures and padded accounts brazenly and recklessly in order to conceal their insolvency from the public and the public authorities. Among the claimed assets, listed ‘Loans and discounts,’ were worthless notes signed by the Paisleys amounting to $52,240.41, and other worthless notes signed by their employees and bankrupt concerns with which they were connected, amounting to $26,108.31. Another item carried as assets under the head ‘Equity in Summerdale Bank building’ at $18,831 was of no value. The building was worth not to exceed $16,000 and the ground was worth approximately $8,000. There was against this property a $17,000 first mortgage and a $25,000, second mortgage. It is not necessary to set out any more of the details. Sufficient has been said to show the character of the assets and to show that the Paisleys were hopelessly insolvent and had full knowledge of their insolvency.

[1][3] The first point urged by plaintiffs in error for reversal is that the trial court erred in overruling a motion by William H. Paisley for a separate trial. The evidence shows that William H. Paisley was a partner with his sons and that he was actively associated with them in the operation of these banks. The record shows that he was present at different times when their financial condition was being discussed. Whether an application for separate trial will be granted rests in the sound discretion of the trial court, and its refusal will not afford ground for reversal unless it appears that there was an abuse of this discretion. People v. Covitz, 262 Ill. 514, 104 N. E. 887. There was no abuse of discretion in denying this motion for separate trial. Furthermore, such a motion must set out grounds showing reasons for granting a separate trial and the motion must be supported by affidavit. 16 Corpus Juris, 788; 19 Ency. of Pl. & Dr. 527; People v. Gukouski, 250 Ill. 231, 95 N. E. 153, Ann. Cas. 1912B, 297;People v. Temple, 295 Ill. 463, 129 N. E. 85. The motion in this case not only failed to allege sufficient grounds but is not supported by affidavit, and it is therefore insufficient.

When plaintiffs in error organized the Edgewater State Bank they borrowed from seven Chicago banks more than $100,000. The largest loan was for $40,000 from the Continental & Commercial National Bank. The other loans were for smaller amounts. Stock in the Edgewater State Bank was deposited with these banks as collateral security. Each of these loans was obtained upon the representation of plaintiff in error that the remainder of the stock had been sold. Of the 2,000 shares issued, plaintiffs in error took 1,350 shares. Further details of this transaction will appear in People v. Paisley, supra, 288 Ill. at pages 317 to 321, 123 N. E. 573. At the time of the former trial the Edgewater State Bank was still in existence and the directors were making an honest effort to save it. The prosecuting attorney did not show in that case the actual value of the stock of the Edgewater State Bank, and the court assumed from the book value given that it was worth par. As will appear from the former opinion, the state auditor had required that an assessment of $60 a share be levied and paid by all the stockholders of this bank. The Paisleys were not able to pay this assessment upon the stock that stood in their name. Representatives of the Edgewater State Bank and the various banks from whom the Paisleys had borrowed money on their stock met to consider what was best to be done regarding this assessment. Three of the banks refused to pay the assessment and surrendered their stock. The State Bank of Chicago held 150 shares of this stock. It refused to pay the assessment and surrendered the stock to the Paisleys and they gave their receipt for it. The bank received no consideration whatever for this surrender. The Continental & Commercial National Bank, which held 400 shares of stock, also refused to pay the assessment and surrendered its stock without consideration. Some of the banks made arrangements whereby their directors paid the assessment and enabled the banks to hold the stock as collateral. The stock that was surrendered was delivered to a syndicate of stockholders of the Edgewater State Bank, who paid the assessment and held the stock as collateral. It now appears in the record in this case that the stock had no market value and no actual value on April 21, 1916, when it was surrendered. The persons to whom they surrendered the stock paid the assessment of $60 on each share and lost all of it. Plaintiffs in error now contend that this stock was worth more than $40,000. This contention is not based on a fair consideration of the proof in the record but on the statement made in the opinion of this court in the former case. One of the errors committed on the former trial was the refusal to give an instruction covering this transaction. Such an instruction was given on this trial, and plaintiffs in error were given the benefit of every legitimate claim made by them. If the jury, in determining their solvency, had given them credit for the full amount claimed, plaintiffs in error would still have liabilities of $350,000 in excess of their assets.

[6] Plaintiffs in error contend that the state proved other acts of misconduct which did not tend to prove the charges under this indictment. One of these irregular transactions concerned a collection for C. O. Anderson of a certificate of deposit for $2,311.87 issued by a bank in Sweden. This certificate was received for collection in July, 1916, and the collection was made immedistely, but Oliver F. Paisley directed Oscar T. Miller, cashier of the North Shore Savings Bank, not to pay the cash to Anderson until January, 1917, because they ‘needed the money.’ This evidence was properly admitted. It tended to show that Oliver F. Paisley then realized his insolvency. Another irregular transaction proven was the making by Oliver F. Paisley of a false financial statement with reference to the assets and liabilities of the North Shore Savings Bank to...