State v. Cormier, A--74

• Decision Date: 21 March 1966
• Docket Number: No. A--74,A--74
• Citation: 46 N.J. 494,218 A.2d 138
• Parties: STATE of New Jersey, Plaintiff-Respondent, v. Robert J. CORMIER, Defendant-Appellant.
• Court: New Jersey Supreme Court

Page 494

46 N.J. 494

218 A.2d 138

STATE of New Jersey, Plaintiff-Respondent, v. Robert J. CORMIER, Defendant-Appellant.

No. A--74.

Supreme Court of New Jersey.

Argued Jan. 10, 1966.

Decided March 21, 1966.

Louis Santorf, Paterson, for appellant.

Archibald Kreiger, Asst. Pros., for respondent (John G. Thevos, Passaic County Pros., attorney).

The opinion of the court was delivered by

JACOBS, J.

The defendant Robert J. Cormier was acquitted on a conspiracy charge that he and James P. Butler had unlawfully agreed to obtain loans from the Franklin Bank and the First National Bank of Passaic County through false statements regarding his company's financial condition. He was later tried and convicted on the substantive charge of unlawfully having obtained loans from the Franklin Bank through such false statements. The question before us is whether the conviction may be permitted to stand in the light of the principles of double jeopardy and Res judicata or collateral estoppel.

Cormier and Butler were president and treasurer, respectively, of Miller and Van Winkle Company, a corporation engaged in manufacturing springs, presses and a machine to process a foam plastic. The machine was marketed under various names, the largest and most expensive being known as Millatron. From time to time the company received purchase orders which were generally filled from available stock. When stock was unavailable and particularly when manufacture of a Millatron or other large machine was called for, a considerable time might elapse between receipt of the purchase order from the customer and the manufacture and shipment of the ordered merchandise. Upon shipment, the customer would be billed by means of an invoice which would be recorded on the company's books as an account receivable.

In November 1960 the company was in urgent need of financing. Though its purchase orders on hand amounted to several hundred thousand dollars, it had little in the way of accounts receivable available for use as collateral for loans. Butler testified that the company's purchase orders included orders from General Electric Company and from another reputable firm called Horrocks-Ibbotson Company, and that Cormier suggested that these be used as 'receivables to back up' a $50,000 loan from the Franklin Bank. Earlier, in May, 1960, the Franklin Bank had made a $25,000 loan secured by a purchase or production order, and it had also made an unsecured loan in the sum of $6500 which the company later repaid. After some discussion, the Franklin Bank agreed to extend credit to the company in the sum of $50,000 on the security of accounts receivable. Of this sum $25,000 was to be used to pay off the May 1960 loan. On November 16, 1960 the loan was made and the May 1960 loan was repaid. A promissory note in the face amount of $50,000 was signed by the company through Cormier and Butler as officers and was delivered to the bank along with their personal guarantees, an assigned account loan agreement, and a schedule of invoices which listed accounts receivable form General Electric Company and Horrocks-Ibbotson Company (later replaced by receivables from the Mengel Company) in the aggregate sum of $62,580. In fact there were no such accounts receivable though the testimony indicated that purchase orders in the stated amount from the named concerns were on hand. On December 28, 1960, a comparable transaction resulting in a loan of $80,520 from the First National Bank of Passaic County was entered into; since it did not vary in any pertinent respects from the Franklin Bank transaction, its details need not be set forth here.

In March 1960 the company filed a petition for reorganization under Chapter XI of the Bankruptcy Act. Since the receivables which had been given as security were nonexistent, the banks had no priority over other general creditors and although they have received something on account, they have nonetheless suffered substantial loss. In due course the matter was presented to the Passaic County Grand Jury which returned three indictments. Indictment No. 909--61 was a conspiracy indictment which charged that Cormier and Butler had unlawfully agreed to obtain loans through false statements regarding 'the financial condition or means and ability of the Miller and Van Winkle Company to pay'; the indictment set forth two pertinent overt acts, namely, (1) the delivery on November 16, 1960 to the Franklin Bank of false and fictitious accounts receivable to secure a loan from that bank in the sum of $50,000, and (2) the delivery on December 28, 1960 to the First National Bank of Passaic County of false and fictitious accounts receivable to secure a loan from that bank in the sum of $80,520. Indictment No. 911--61 charged Cormier and Butler with having made false statements on November 16, 1960 to the Franklin Bank with respect 'to the financial condition or means and present ability of the said Miller and Van Winkle Company to pay' for the purpose of obtaining the $50,000 loan. Indictment No. 912--61 charged Cormier and Butler with having made false statements on December 28, 1960 to the First National Bank of Passaic County with respect to the company's financial condition for the purpose of obtaining the $80,520 loan. The conspiracy indictment was brought under N.J.S. 2A:98--1, N.J.S.A., whereas the other indictments were brought under N.J.S. 2A:111--8, N.J.S.A.

In May 1963 the State moved to sever as to Butler since he was to be one of the State's witnesses. This motion was granted without objection and the State then sought to consolidate the three indictments for trial. In support of consolidation the State represented to the trial judge that 'the facts that will be adduced at this trial, if only the conspiracy indictment is moved, will be the same facts that will be adduced in regard to the other two indictments that the State intends to move for trial, namely indictment number 911--61 and indictment 912--61. These three indictments, if your honor please, are based on the same facts and circumstances.' The defendant objected to consolidation and after hearing argument the trial judge announced that the trial of 'the conspiracy indictment alone' should first proceed.

The conspiracy trial began on May 27, 1963 and ocncluded on June 5, 1963. The State's witnesses included Butler, officers of the Franklin Bank and the First National Bank of Passaic County and others. The defendant Cormier testified on his own behalf. The burden of his defense was that the loans were made by the banks on the security of purchase orders rather than accounts receivable, that the purchase orders were Bona fide and on hand, that there was no intent on his part to defraud, and that Butler was the one responsible for the forms of the instruments executed in connection with the loans. In his charge, the trial judge set forth the State's contention that the loans were obtained on the security of invoices which were false and fictitious, and the defendant's contention that 'the terms agreed upon' for the loans were 'accounts which he described as orders then on hand, orders then in the process of manufacturing.' The judge told the members of the jury that they should resolve and determine the factual issue which he considered as crucial and which he described as 'a narrow and simple one,' namely, 'What were the terms upon which each loan was granted, as contended by the State, or as contended by the defendant?' Although the testimony supported by the documentary evidence would seem to have left little doubt on this score, the jury returned a verdict of not guilty which is, of course, not subject to reopening.

After the not guilty verdict was returned on the conspiracy indictment, the defendant moved to dismiss the remaining indictments. His motion papers set forth that the indictments arose out of the same facts and circumstances, all of which were presented during the conspiracy trial. At the argument on his motion he stressed that during the conspiracy trial there was no dispute as to Cormier's instructions to Butler 'to submit these things,' and that his whole defense centered upon his contention 'that the loans were granted upon purchase orders that were actually in existence.' In denying the motion, the trial judge took the position that the acquittal meant only that Cormier and Butler had not entered into any unlawful agreement or conspiracy between themselves and did not amount to a fnding that Cormier had not alone committed the overt acts of obtaining the loans on the security of false and fictitious accounts receivable.

When the defendant sought leave from the Appellate Division to appeal from the denial of his motion, the State acknowledged that the question was 'a very close one' but urged that leave to appeal should be denied without prejudice to the defendant's right to renew his motion to dismiss at the trial on the substantive charge. The Appellate Division denied the leave sought and thereafter the State moved the trial of indictment No. 911--61. This trial began on October 5, 1964 and concluded on October 9, 1964, the evidence was substantially the same as that introduced with respect to the Franklin Bank loan during the conspiracy trial, a motion to dismiss on the basis of the earlier acquittal was denied, and the matter was submitted to the jury which returned a verdict of guilty. The defendant was sentenced to a 1--2 year prison term which was suspended and he was fined $1,000. He appealed to the Appellate Division and we certified before argument there.

The courts in our State and elsewhere have long adhered to the doctrine that conspiracy to commit a crime is a separate and distinct offense from the substantive crime committed pursuant to the conspiracy. See State v. Chevencek, 127 N.J.L. 476, 23 A.2d 176 (Sup.Ct.1941); State v. Oats, 32 N.J.Super. 435, 108 A.2d 641 (App.Div.1954); see also Callanan v. United States, 364 U.S. 587, 81...