State v. Hightower

• Decision Date: 27 February 1924
• Docket Number: 241.
• Citation: 121 S.E. 616,187 N.C. 300
• Parties: STATE v. HIGHTOWER.
• Court: North Carolina Supreme Court

121 S.E. 616

187 N.C. 300

STATE v. HIGHTOWER.

No. 241.

Supreme Court of North Carolina

February 27, 1924

Appeal from Superior Court, Wake County; Cranmer, Judge.

J. H Hightower was convicted of receiving bank deposits after knowledge of the institution's insolvency, and he appeals. New trial granted.

Clark C.J., and Clarkson, J., dissenting.

In a prosecution of a bank president for the receipt of deposits after knowledge of insolvency, error in denying the right to cross-examine the state bank examiner and an auditor as to the grounds upon which they based a stated opinion that the bank was insolvent on the date alleged, held not cured or rendered harmless by subsequently allowing the cross-examination of one of them affecting such matters particularly where the court in its charge ignored matters sought to be shown by the answers excluded.

Criminal prosecution tried upon an indictment charging the defendant and one H. H. Massey, president and cashier respectively of the Central Bank & Trust Company, a banking institution located in the city of Raleigh, N. C., with willfully and feloniously receiving money, checks, drafts, or other property as deposits in said Central Bank & Trust Company on the 13th day of January, 1922, when they and each of them had knowledge of the fact that such banking institution was insolvent and unable to meet its depositary liabilities as they became due in the regular course of business, in violation of chapter 4, § 85, Public Laws 1921.

The jury acquitted the defendant H. H. Massey and convicted the defendant J. H. Hightower. From a judgment sentencing the defendant Hightower to an indeterminate imprisonment in the state's prison of not less than 2 1/2 years and not more than 4 years, as provided by C. S. § 7738, the defendant appeals, assigning errors.

Willis Smith and Charles U. Harris, both of Raleigh, for appellant.

J. S. Manning, Atty. Gen., and Frank Nash, Asst. Atty. Gen., for the State.

STACY J.

The pertinent provisions of the statute, under which the present indictment is laid, are as follows: "Sec. 85. Insolvent Banks, Receiving Deposits in. Any person, being an officer or employee of a bank, who receives, or being an officer thereof, permits an employee to receive money, checks, drafts, or other property as a deposit therein when he has knowledge that such bank is insolvent, shall be guilty of a felony, and upon conviction thereof shall be fined not more than five thousand dollars or imprisoned in the state's prison not more than five years, or both." Chapter 4, Public Laws 1921.

In the first section of said act, so far as now applicable, the term "insolvency" is defined to mean: (a) "When a bank cannot meet its deposit liabilities as they become due in the regular course of business"; and (b) "when the actual cash market value of its assets is insufficient to pay its liabilities to depositors and other creditors." The remaining definition of said term, as contained in the statute, is not material for present purposes; the evidence relates only to the ones just given.

In order to obtain a conviction, under the provisions of this statute, it may be observed in limine, the state must prove beyond a reasonable doubt: (1) That the deposits described in the bill of indictment were actually received; (2) that the bank in question was insolvent at the time the alleged deposits were received therein; and (3) that the defendant, officer or employee of the bank, received, or such officer thereof permitted an employee to receive said deposits, with knowledge at the time of the insolvency of such bank. These are the essential elements of the offense condemned by the statute, and which is denominated a felony therein.

The principal evidence offered by the state, of which the defendant first complains, is that of Clarence Latham, state bank examiner, and W. S. Coursey, an expert accountant, or "auditor employed by the banking department to make an audit of the bank" (defendant's brief), to the effect that, in the opinion of said witnesses, the Central Bank & Trust Company was insolvent on the 13th day of January, 1922, the day on which it is alleged the defendant, as president of said banking institution, received certain deposits therein, with knowledge at the time that such banking institution was then insolvent. These opinions were based upon an examination and investigation of the affairs of the bank, made by the two witnesses in the discharge of their official duties. The competency of this evidence is assailed upon two grounds:

First, it is challenged because, it is alleged, the witnesses were allowed to express their opinions upon one of the essential facts necessary to constitute the offense charged and which the jury alone was impaneled to decide. "Whatever liberality may be allowed in calling for the opinions of experts or other witnesses, they must not usurp the province of the court and jury by drawing those conclusions of law or fact upon which the decision of the case depends," says Fuller, J., in State v. Stevens, 16 S.D. 317, 92 N.W. 423, a case dealing with the insolvency of a bank. And speaking to a similar question in People v. Paisley, 288 Ill. 310, 123 N.E. 573, Duncan, J., says: "No witness can thus invade the province of the jury, expert or otherwise." See, also, State v. Myers, 54 Kan. 206, 38 P. 296; Ellis v. State, 138 Wis. 513, 119 N.W. 1110, 20 L. R. A. (N. S.) 444, 131 Am. St. Rep. 1022.

Second, it is questioned because, as a prerequisite to the expression of such opinions, the witnesses were not required to state the facts upon which they based their conclusions. In White v. Bailey, 10 Mich. 155, Campbell, J., says that no witness, expert or other, should be allowed to give in evidence an opinion on one of the essential facts to be shown, unless he first state the foundation or basis of his opinion. "This is necessary for two reasons: First, it is necessary in order to enable other experts to determine whether the opinions expressed by the witness are correct, and to enable the parties to contradict them if wrong. Second, it is necessary in order that, if an opinion is given on a mistaken or perverted statement of facts, the truth may be elicited from others to destroy the foundation of the conclusions. And a third reason might be mentioned, which is that the court and jury may know from his opportunities what means the witness had of forming any opinion at all. These are rudimentary principles which cannot safely be departed from."

We have cited some of the authorities, probably the strongest ones, which tend to support the defendant in his position on the two grounds stated above. But the decisions elsewhere are not all one way. They are in sharp conflict. The precise question now raised apparently is presented for the first time in this jurisdiction--certainly for the first time under the present statute. In the light of the instant record, we think the defendant's initial class of objections to the admission of the opinion evidence of the witnesses Latham and Coursey must be overruled on both grounds. These witnesses, the one a state bank examiner and the other an auditor employed by the state banking department, it is conceded, possess special skill for interpreting or drawing inferences from observed data of their own, or from observed data furnished by others, and their conclusions or opinions purport to be based upon an examination or investigation of the subject-matter about which they undertake to speak. "To warrant its introduction" (expert opinion evidence), says Earl, J., in Ferguson v. Hubbell, 97 N.Y. 513, 49 Am. Rep. 544, "the subject of the inquiry must be one relating to some trade, profession, science or art in which persons instructed therein, by study or experience, may be supposed to have more skill and knowledge than jurors of average intelligence may be presumed generally to have." And to like effect is the language of Beck, C.J., in Hamilton v. R. R. Co., 36 Iowa, 36:

"Every employment requires a degree of skill, and there is none in which a degree of proficiency may not be obtained by practice. This fact is no ground for the admission in evidence of the opinions of men engaged in every pursuit in regard to matters pertaining thereto. The pursuit in which the witness claims to be an expert must be one of science, skill, trade, or the like; these things pertain to the pursuit, and opinions of those proficient therein may be heard. But one skillful in pursuits not of this character may not give an opinion. The pursuit itself must be considered in determining who may be examined as experts."

The business of examining banks undoubtedly falls within the classification of trades or pursuits, requiring special skill or knowledge, and hence one versed in its intricacies, we apprehend, should be permitted to speak as an expert. It is not questioned, on the instant record, but that the two witnesses offered by the state are competent to speak as experts in their field, or in their line of work.

Mere opinion evidence was wholly rejected by the early English courts as being insufficient to support an absolute judgment or to hold a witness for perjury. Hence, it was not received as evidence at all. "It is no satisfaction for a witness to say that he 'thinketh' or 'pursuadeth himself,' was the reason assigned for its exclusion by Coke. And in State v. Allen, 8 N.C. 9, 9 Am. Dec. 616, Henderson, J., said:

"The law requires that he who deposes to a fact, should have the means of knowing it. Grounds of conjecture and opinion are not sufficient."

But the law in this respect has been the subject of considerable growth and development, both in England and in this country. The history of this development, beginning with its...