State v. Clements

Decision Date11 February 1901
Docket Number12,378 - (13)
Citation85 N.W. 229,82 Minn. 434
PartiesSTATE v. JOSEPH R. CLEMENTS
CourtMinnesota Supreme Court

Defendant was convicted in the district court for Houston county of having, while engaged in the private banking business, as member of a firm doing business under the name of the Fillmore County Bank, received a deposit knowing the bank was insolvent. From an order, Kingsley, J., denying a motion for a new trial defendant appealed. Affirmed.

SYLLABUS

Deposit in Insolvent Bank -- Laws 1895, c. 219.

Under the provisions of Laws 1895, c. 219, which makes it a felony for any one connected with a banking concern, either public or private, to receive deposits while such institution is insolvent, it is not material in what capacity the accused party is connected with the bank, -- whether as an ostensible partner, or as a secret conspirator with the actual operator of the same, -- provided any substantial aid is given by him tending to violate the statute.

Liability of Former Partner after Sham Dissolution.

A former dissolution of a banking firm cannot control the subsequent responsibility of the former partners if it is executed as a sham to relieve one of them, nor exonerate the retiring partner from full accountability for subsequent acts in an unlawful plan to receive deposits during the insolvency of the bank. In such a case the dissolution should be treated as an illegal and fraudulent device.

Books of Account -- Evidence of Expert.

When books of account, which are material to an issue on trial are properly received in evidence, and, being in court, open to inspection by all parties, require a long examination of many details, it is proper to receive balances or summaries from an expert witness, who has made the same, upon proper foundation being laid.

Evidence of Conspiracy.

Evidence of a continual depletion of the resources of a bank partnership, continued for several years, is competent upon the question whether an unlawful scheme existed to wreck the concern in failure, and as showing a motive for a sham dissolution, whereby one of the partners could withdraw therefrom a portion of its funds.

Corroboration.

No person can be convicted upon the uncorroborated testimony of an accomplice, but such corroboration is not required to be sufficient, independent of the evidence of such accomplice, to establish all the elements of the crime charged, but should tend, in some degree, to show the guilt of the accused.

Evidence of Accomplice.

Evidence in this case considered, and applied to the testimony of an accomplice showing that there was sufficient corroborating testimony independent of the evidence of such accomplice (whose confessions as a witness at the trial, if believed, established the guilt of defendant) to warrant the submission of the case to the jury under the rule laid down in State v. Lawlor, 28 Minn. 216, which is approved and followed.

Charge to Jury -- Insolvency.

Alleged errors in the charge of the court defining insolvency considered, and held to be without prejudice to the defendant, while the remaining assignments are not of sufficient merit to require specific mention.

Losey & Woodward and Webber & Lees, for appellant.

W. B. Douglas, Attorney General, John W. Hopp, County Attorney, Brown & Abbott and S. H. Somsen, for respondent.

OPINION

LOVELY, J.

Defendant was convicted under Laws 1895, c. 219, of having, as a member of the banking firm of Clements, Greenleaf & Todd, operating the Fillmore County Bank at Preston, Minnesota, received a deposit of money from one Catherine K. Mack, knowing such bank to be insolvent.

The Fillmore County Bank commenced its operations at Preston in 1886. It was a private concern (unincorporated), composed of the defendant, Julia F. Greenleaf, and Maurice R. Todd, who admittedly continued the partnership until October 19, 1894, when an agreement of dissolution was signed by the partners, under the terms of which defendant withdrew therefrom; the business subsequently, to all appearances, being conducted by the two remaining partners, under the firm name of Greenleaf & Todd, until August 20, 1898, when the bank closed its doors with nothing to show for large sums of money that had been previously intrusted to its keeping by depositors.

A scrutiny of its books disclosed the fact that it had been insolvent for some time. It was the claim of the prosecution that the dissolution agreement of October, 1894, was in furtherance of a fraudulent scheme between Todd and defendant for the purpose of having the latter retire from the business while it was insolvent, to cover up unlawful withdrawals of large sums, which had placed the bank beyond the hope of financial recuperation by any legitimate business methods, which design was unknown to Mrs. Greenleaf, who signed the dissolution agreement in good faith; that subsequent to the paper dissolution defendant continued to withdraw substantial sums of money from the bank, which further depleted its assets and increased its insolvency, until the crash came; and that by reason of defendant's participation in this fraudulent scheme he became criminally accountable, under the terms of the statute upon which he was indicted, for the acts of Todd, his co-conspirator, who personally received the deposit from Mrs. Mack while defendant himself was at La Crosse, Wisconsin.

In a civil action brought for depositors against the three partners, previously before this court (Utley v. Clements, 79 Minn. 68, 81 N.W. 739), an extended history of the Fillmore County Bank is given, and we shall here refer to its operations disclosed by the record no further than necessary to dispose of such assignments of error as we deem of sufficient importance to be considered on this review.

Defendant resided at all times at La Crosse, Wisconsin. Until the dissolution agreement in 1894, he visited Preston frequently, remaining there at times several days, and joined in the direction and management of the business affairs of the bank. For a while he assumed to act as president, while Todd was cashier. This ostensible designation of the name and officers of the bank was continued for some time afterwards, until such use of the same in conducting a private banking business was forbidden by law. The business continued under the firm name of Clements, Greenleaf & Todd up to the time of the dissolution referred to. No announcement of the dissolution was given out in local papers, nor was any effort made to publish the same to the people who were directly intrusting the bank with their funds. The old bank stationery of Clements, Greenleaf & Todd was used until April, 1895, when a stencil stamp, "Greenleaf & Todd," was procured, and applied to the printed blank forms used by the former firm. When the bank closed its doors, Todd was arrested, and after several days' confinement confessed that he had been a party to a systematic scheme adopted by defendant and himself to withdraw gradually the funds of the depositors, and place them in defendant's hands in an unlawful trust for both; that, except such sums as Todd and Mrs. Greenleaf had used for the simple necessities of life, the balance of such withdrawals had been put for fraudulent purposes into defendant's hands. From this time Todd became an assistant of the state, and testified against the defendant in the present action to matters which, if believed, conceded his own infamy in the effort to convict the defendant of the crime charged. He also gave testimony in civil and criminal suits growing out of the failure and wreckage of the bank.

It is proper to say in this connection that the result of the different investigations growing out of this unfortunate affair relieve Mrs. Greenleaf, who was the mother-in-law of Todd, of any guilty knowledge or participation in the transaction, which absorbed her own little fortune, and doubtless hastened her death. No trace of suspicion, discreditable action, or bad motive can be fastened upon any member of the Todd family, save Todd himself. Mrs. Greenleaf was a simple-minded elderly lady; no doubt a victim of overconfidence in her son-in-law, whom she trusted implicitly. This statement is due to her memory.

It must be conceded that without the testimony of Todd the evidence would not be sufficient to sustain the verdict. His story is a remarkable one, for it exhibits an ignorance of correct business methods, a depth of cold-blooded depravity on the part of the alleged conspirators, a blind submission by Todd as a tool of defendant, and an apparent overweening confidence in his partner in crime that amounted to infatuation in the belief that he who was defrauding every one else might safely rely upon his alleged fellow knave in craft and guilt; but the exhibition of such inconsistencies are not uncommon in the annals of crime. We are often apt to look for too much wisdom and common sense in the behavior of those who attempt to succeed by criminal methods. There is but one safe course in life, -- the honest one. All knaves are in a large measure fools; and, while some statements made by Todd seem incomprehensible if tested by the rules that govern honest men in their business relations with each other, yet such are the common indicia and characteristics of peculation and fraud among those who set the safeguards of justice at defiance.

According to the story of Todd, which we must adopt in this narrative to give expression to the facts found to be true by the jury the largest part of the capital of the bank at its organization was used in the purchase of a lot, building, vault, safe, and the general outfit usual in a country bank. From this time forward until the Mack deposit, June 17, 1895, the legitimate earnings of the bank during...

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