State v. Parker

Decision Date09 February 1932
CourtConnecticut Supreme Court
PartiesSTATE v. PARKER. STATE v. SMITH (two cases).

Appeal from Superior Court, New Haven County; Alfred E. Baldwin Judge.

John E Parker, Clarence V. Smith, and Paul M. Smith were convicted of conspiracy to cheat and defraud note holders under mortgages of which the Parker-Smith Company was trustee, and they appeal.

No error.

See also, 112 Conn. 39, 151 A. 325.

Benjamin Slade and Louis Weinstein, both of New Haven, for appellants.

Samuel E. Hoyt, State's Atty., Arthur F. Brown and Abraham S. Ullman, Asst. State's Atty., all of New Haven, for the State.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY, JJ.


The information charges in substance that the Parker-Smith Company was a corporation organized under the laws of Connecticut, and authorized, among other things, to deal in investments of all kinds, including loans and notes, to loan on its own behalf and as agent for others and to take security therefor by way of mortgage on real property; that for a long time and until May 29, 1929, the defendant Parker was president, the defendant Clarence V. Smith, treasurer, and the defendant Paul M. Smith, secretary, of the corporation, and these three were the sole directors; that on or about June 1, 1928, they and the corporation conspired, confederated, combined, and agreed together to unlawfully convert, appropriate, purloin, and secrete to the use and benefit of the company large sums of money, by means of collecting certain mortgages to the company as trustee, the notes secured by which were owned and held by sundry persons to whom they had been sold by the company, and concealing the payment of the mortgage debts from the note holders, with intent to use the proceeds of such payments to pay the expenses and liabilities of the company and interest due on other mortgages of which the company was trustee; that thereafter, on divers days between June 1, 1928, and May 29, 1929, in pursuance of the conspiracy, they collected certain such mortgage debts, failed to give notice to the note holders that these mortgage debts had been paid, and used the proceeds to pay the debts, expenses, and liabilities of the company and to pay interest due on other mortgages. It is then further alleged, as to each of twenty-four specified mortgages, that the defendants and the company on a specified date collected the named mortgage debt, caused a release to be executed by the company, failed to notify holders of the notes secured thereby that the mortgage had been paid, failed to pay the holders of the notes from the funds collected upon said mortgage, and used the same for the use and benefit of the Parker-Smith Company.

From the record there appears to have been no dispute that the defendants were the sole officers and directors of the Parker-Smith Company and the sole managers of its affairs; that the company was the trustee of all the mortgages specified, and through its officers and agents sold the notes which were secured by the mortgages, the notes being payable to bearer or registered holder, and most, if not all, registered with the company; that the mortgages were paid, but no notice thereof given to note holders, and that interest was continued to be paid to the note holders after the mortgages had been paid and released.

It also appears to be uncontroverted that, while theretofore moneys received from paid mortgages had been deposited in the general bank accounts of the company and paid to the note holders therefrom, after an examination by the state bank commissioner in 1928, and in pursuance of a suggestion by him, in several instances the amount received in payment of a mortgage was deposited in a segregated account, designated by the name of the mortgagor, in a West Haven bank. However, instead of the note holders being paid from such segregated account, as was obviously the intention and purpose of its establishment, it is admitted that no payments were so made, but that from time to time, as the general bank accounts of the corporation became overdrawn, a check on one or more of the segregated accounts would be signed by either Paul Smith or Clarence Smith, and deposited in the bank in which the account was overdrawn; and such payments as were made on paid-off mortgage notes were not made by check on the segregated accounts, but on one of the general bank accounts.

Of the twenty-four mortgages specifically referred to in the information, fifteen were made the subject of such segregated accounts, the total amount deposited therein being $165.608.68; the amounts withdrawn therefrom and used as above stated totalled $164.208.68, leaving a balance of only $1,400 in segregated accounts on May 29, 1929, when a receiver was appointed at the instance of the bank commissioner.

The defendants offered evidence to prove that the methods pursued, including the collection of debts secured by mortgage, omission to give notice of such payments to note holders and payment to them of interest thereafter, deposit of moneys received in payment of trustee mortgages in the corporation's general bank accounts, and payment of principal and interest therefrom, had been used and continued since 1921, with the exception of the intervention of segregated accounts in 1928 as above stated; that complete and accurate accounts were kept; that the trustee mortgages contained no provision requiring notice of payment to note holders; that all, holders of matured notes who presented them for payment were paid; that the bank commissioner had access to the books and to knowledge of the course pursued as to the segregated accounts; that the corporation's attorney advised that the segregated funds might be used for the general purposes of the corporation (which was denied by the attorney except in one instance as to payment of taxes to avoid foreclosure); and they claimed that the course of conduct was not with intent to cheat and defraud any note holder, but to protect the interests of all investors: that they believed the assets of the corporation sufficient to pay all note holders in full; that there was no agreement or understanding between them or any of them to use unlawfully the funds or to cheat or defraud note holders, but that their acts of omission and commission were due solely to poor business judgment and lack of understanding, and were done in good faith.

The assignments of error are extremely numerous, covering the overruling of motions for a bill of particulars, to quash the information, in arrest of judgment, and to set aside the verdict, failure to charge as requested, portions of the charge as given, and rulings on evidence. Many of these relate directly or indirectly to, and are largely determined by, a few general propositions. The first of these is the contention by the defendants that the information was insufficient and the conviction unwarranted, in that neither the object nor the means alleged is criminal, either under statute or common law, and that this is an essential element of the offense charged. We are not required to determine whether either the means or the object alleged is criminal, for the reason that the theory of the case, as set up in the information, presented on the trial, and submitted to the jury, was that the object or the means need not necessarily be, in itself, criminal, but that it is sufficient, in this respect, if the object is unlawful or unlawful means are employed in effecting it. Therefore, as to the criminality of the nets or object involved, we pause only to refute the suggestion of the defendants, in brief and argument, that the opinion in the former appeal (112 Conn. 39, 151 A. 325) may be construed as holding that a corporation could not be prosecuted and punished for embezzlement by trustee under the Connecticut statute (section 6364, General Statutes 1918) in effect at the time of the acts alleged. The discussion and decision so far as related to section 6364 was confined to the inquiry whether the statute was sufficiently comprehensive to include and support a prosecution of officers of a corporation trustee for misappropriation of trust funds. The present case also offers no occasion for decision of the question of the criminal liability, under this statute, of the corporation itself.

The soundness of the principle adopted on the trial is now generally recognized. It conforms in all essential respects to the general definitions of conspiracy stated by text-writers and adopted in cases here and elsewhere. " In order that a combination may be punishable it must be formed to do either in unlawful act or a lawful act by criminal or unlawful means. *** It is not essential, however, to criminal liability that the acts contemplated should constitute a criminal offense for which, without the elements of conspiracy, one alone could be indicted. It is an offense independent of the crime or unlawful act which is its purpose; and it will be enough if the acts contemplated are corrupt, dishonest, fraudulent, or immoral, and in that sense illegal. A conspiracy will be indictable, if the end proposed or the means to be employed are, by reason of the combination, particularly dangerous to the public interests, or particularly injurious to some individual, although not criminal." 12 Corpus Juris, p. 547; 1 Brill, Cyclopedia Criminal Law (11th Ed.) p. 1739; Fimara v. Garner, 86 Conn. 434, 437, 85 A. 670; State v. Stockford, 77 Conn. 227, 58 A. 769, 107 Am.St.Rep. 28; State v. Glidden, 55 Conn. 46, 8 A. 890, 3 Am.St.Rep. 23; State v. Rowley, 12 Conn. 101, 112; Commonwealth v. Hunt, 4 Metc. (45 Mass.) 111, 121, 123, 38 Am.Dec. 346; State v. Burnham, 15 N.H. 396, 402; Harris Case, 113 Va....

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24 cases
  • State v. Hayes
    • United States
    • Connecticut Supreme Court
    • 4 Marzo 1941
    ... ... These ... defendants, however, cannot be held criminally liable in this ... action for negligence in the performance of their duty or ... that of their employees or for misconduct on the part of the ... latter of which they had no knowledge. State v ... Parker, 112 Conn. 39, 56, 151 A. 325. It was error to ... refuse to set the verdict aside as to these two defendants ... In the ... appeals from the judgments, the defendants assign errors in ... the action of the trial court in overruling [127 Conn. 575] ... various motions, in ... ...
  • State v. Williams
    • United States
    • Connecticut Supreme Court
    • 4 Marzo 1986 a request are more informal and expressed with less exactness than are studiously prepared formal charges...." State v. Parker, 114 Conn. 354, 368, 158 A. 797 (1932). We are unable to agree with the defendant that the jury could reasonably have understood the supplemental instructions as......
  • Novella v. Hartford Acc. & Indem. Co.
    • United States
    • Connecticut Supreme Court
    • 27 Julio 1972
    ...speculative imaginings, or refined reasoning.' Foote v. Brown, 81 Conn. 218, 227, 70 A. 699, 702; State v. Parker, . . . (114 Conn. 354, 370, 158 A. 797); Amato v. Desenti, 117 Conn. 612, 617, 169 A. 611.' State v. Johnson, 139 Conn. 89, 93, 90 A.2d 905, 907; DePaola v. Seamour, 163 Conn. 2......
  • State v. Kemp
    • United States
    • Connecticut Supreme Court
    • 16 Noviembre 1939
    ... ... business; and the only record he kept of them was in a small ... personal memorandum book. There was no evidence that by ... reason of these payments to the defendant the state paid any ... more for the lands than it would otherwise have done ... In ... State v. Parker, 114 Conn. 354, 360, 158 A. 797, ... 799, was quoted, with approval, from 12 C.J., p. 547, as ... follows: ‘ In order that a combination may be ... punishable [126 Conn. 78] it must be formed to do either an ... unlawful act or a lawful act by criminal or unlawful means. * ... * * It is not ... ...
  • Request a trial to view additional results
1 books & journal articles
  • Toward Coherence in Civil Conspiracy Law: a Proposal to Abolish the Agent's Immunity Rule
    • United States
    • University of Nebraska - Lincoln Nebraska Law Review No. 84, 2021
    • Invalid date
    ...where an agent acts unilaterally, a finding of plurality "would over-extend the fiction of corporate personality")). 157. State v. Parker, 158 A. 797, 800 (Conn. 1932); People v. Dunbar Contracting Co., 151 N.Y.S. 164, 166 (1914); Standard Oil Co. v. State, 100 S.W. 705, 718 (Tenn. 1907)); ......

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