People v. Small

• Decision Date: 09 February 1926
• Docket Number: No. 16660.,16660.
• Citation: 319 Ill. 437,150 N.E. 435
• Court: Illinois Supreme Court
• Parties: PEOPLE v. SMALL et al.

319 Ill. 437

150 N.E. 435

PEOPLE

v.SMALL et al.

No. 16660.

Supreme Court of Illinois.

Dec. 16, 1925.

Rehearing Denied with Modification Feb. 9, 1926.

Suit by the People of the State of Illinois against Len Small and others. Decree for plaintiff, and defendants appeal.

Affirmed.

Duncan and Heard, JJ., dissenting.Appeal from Circuit Court, Sangamon County; Frank W. Burton, judge.

Werner W. Schroeder and Sims, Welch, Godman & Stransky, all of Chicago, and Dailey, Miller, McCormick & Radley, of Peoria (F. J. Stransky, of Savannah, and R. H. Radley, of Peoria, of counsel), for appellants.

Oscar E. Carlstrom, Atty. Gen., Charles W. Hadley, of Wheaton, Albert D. Rodenberg, of Springfield, Ashton E. Campbell, of Champaign, and William E. Trautmann, of East St. Louis, for the People.

PER CURIAM.

This appeal is from a decree of the circuit court of Sangamon county ordering that Len Small and the other appellants jointly and severally account for all money received by or paid to Small, Edward C. Curtis, and Verne S. Curtis, or either of them, as discount or interest on funds of the state of Illinois loaned by Small during his term as state treasurer through the Curtises or the Grant Park Bank to Armour & Co., Swift & Co., and other persons and corporations.

The bill of complaint, filed November 26, 1921, after alleging the election of Len Small to the office of state treasurer in 1916 and his qualification and assumption of the duties of that office January 8, 1917, charges that Small, in combination with E. C. Curtis and V. S. Curtis, entered upon the execution of a plan by which large sums of money from the state treasury were to be used to their personal advantage and profit; that pursuant to said unlawful plan Small from time to time turned over to an alleged private banking institution, called ‘Grant Park Bank,’ large sums of public moneys; that said public moneys were carried on the books of the state treasurer in an account called by Small ‘Safe Fund’ for the purpose of concealing the fact that said public moneys were being used by Small and the Curtises for their private gain; that the public moneys so turned over by Small to the Curtises were used in the purchase of notes and other securities of Armour & Co., Swift & Co., and divers other persons and corporations; that Small and the Curtises collected from said persons and corporations, as interest and discounts on the notes so purchased, large sums of money, aggregating more than $1,000,000; that all of this sum is the property of the state of Illinois, and that appellants are liable to account for the same; that Small has not paid into the state treasury any portion of the interest or discount collected from that part of the public moneys designated ‘Safe Fund;’ that in neither of the two reports made by Small, as treasurer, of interest received by him on public moneys deposited in banks in the state is there can itemized statement of interest received; that such lump sum reports were made for the purpose of concealing the amount of money received through the Grant Park Bank transactions; that the account of public funds invested by Small through the Curtises was kept by Small personally in his private office above his bank in Kankakee, and that this private account book and certain records of the state treasurer's office have been destroyed by Small for the purpose of concealing the amount of interest and discounts realized from the private use of said public moneys. It is further charged that the number, nature, and complexity of the accounts involved in this litigation render appellee's remedy at law wholly inadequate, and that it is without remedy except in a court of equity. The bill concludes with a prayer that an accounting may be had, that the amount of interest and profits realized from the use of said public moneys by Small and the Curtises may be determined, and that appellants be decreed to pay to appellee the amount found due appellee upon such accounting.

Appellants filed demurrers, both general and special, in which, among other things, they charged that the act providing for the deposit of state moneys by the state treasurer, and for the payment of interest on the same, and for an appropriation for the cost of the official bonds of the treasurer and his employees, approved March 7, 1908 (Laws 1908, p. 32), is unconstitutional, and that equity is without jurisdiction to enterain this proceeding because complainant has an adequate remedy at law. The act was held void, but all other causes of demurrer were overruled. Thereupon Small filed a special and separate plea, averring that he had been indicted,tried, and acquitted upon a charge of conspiracy on account of the identical matters and things set forth in the bill of complaint, and that appellee is now estopped by the verdict in the criminal case from again litigating material questions of fact by it decided. This plea in bar was held insufficient. On Small's motion he was given leave to insert the substance of his plea in his answer. This was done, and an exception to that part of the answer was sustained.

By his separate answer, which covers 90 pages of the record, Small admits his incumbency of the office of state treasurer for the two-year term beginning January 8, 1917, the duty of holding and safely keeping the public moneys of the state, and the duty to account for the principal and all the interest or other profit earned on said moneys. He denies the failure to make proper reports, the nonexistence of the Grant Park Bank, the unlawful combination and confederacy with the Curtises, the use of public moneys to his personal advantage, the receipt of interest, fees, or other profit derived from the use of public moneys for which he has not accounted to the state, the keeping of the books of the officeof state treasurer so as to conceal the deposits in the Grant Park Bank, the destruction of records and books, and all other charges of wrongdoing. He alleges that he has accounted for all of the interest, discounts, and profits received by him during his term as state treasurer for the use of public moneys deposited in the banks of the state; that the Grant Park Bank was a legitimate private bank owned by Edward C. Curtis, and was doing a general banking business during the period here involved; that all moneys deposited in the Grant Park Bank were charged to an account called ‘Safe Account’ in the treasurer's office; that all such deposits were evidenced by certificates of deposit it issued by the Grant Park Bank, and were secured by collateral deposited with him by the owner of said bank; that the Grant Park Bank paid interest on the moneys deposited with it; that he has accounted to the state for all interest received on such account; that he has filed all reports required by law, and has in all other respects fully discharged his duties and obligations as state treasurer. He charges that appellee has an adequate and complete remedy at law, and that equity is without jurisdiction.

Appellant Etha G. Curtis, administratrix of the estate of Edward C. Curtis, deceased, neither admits nor denies most of the allegations of the bill, but prays strict proof of all of them. She admits that Curtis died March 8, 1920, and that she was appointed administratrix of his estate by the county court of Kankakee county. She denies the unlawful confederacy, and that appellee is entitled to an accounting against the estate of her intestate, and denies that there is a liability or any basis for an accounting. She charges that this demand of appellee is barred by statute for the reason that she filed an inventory of the estate, and that this action was not commenced within one year from the granting of letters of administration.

Verne S. Curtis filed a plea reciting that certain criminal proceedings were pending against him arising out of the same transaction, and that he could not answer the bill for the reason that his answer might tend to incriminate him. This plea was sustained, and an order entered that the same should stand as his answer to the bill.

The master to whom the cause was referred took and reported over 11,000 pages of evidence, consisting largely of records from the state treasurer's office, of the five principal packers (Armour & Co., Swift & Co., Morris & Co., Cudahy & Co., and Wilson & Co.), of the Ft. Dearborn National Bank, the Live Stock Exchange National Bank, the Grant Park Trust & Savings Bank, the First Trust & Savings Bank of Kankakee, and of divers other persons and banks. He recommended a decree in accordance with the prayer of the bill. Exceptions to the master's report were filed and overruled, and a decree entered finding that the court had jurisdiction of the subject-matter and the parties;that Small, as state treasurer, and the Curtises, entered into a fraudulent scheme through and by which large sums of money belonging to the state of Illinois, in possession of Small as state treasurer, were invested through the Curtises for the private gain of said persons under the pretense of depositing public funds in the Grant Park Bank which had no existence as a banking institution; that large sums of money were collected by the Curtises for the benefit of Small, and that Small and the Curtises jointly and severally became liable and obligated to pay over to the state of Illinois all such discounts, interest, profit, and income paid to or received by them from the use of such public funds. The decree orders appellants to account for all such sums of money due the state of Illinois, and again referred the cause to the master, with directions to take and state the account of appellants in accordance with the terms of the decree, upon the pleadings and all the testimony and exhibits in the master's report, and upon such further proof as may be offered by any of the parties material and relevant to such accounting.

[1][2] We are met at the threshold of this case with a...