State v. Steneck

• Decision Date: 19 May 1937
• Citation: State v. Steneck, 192 A. 381, 118 N.J. Law 268 (N.J. 1937)
• Docket Number: 3
• Court: New Jersey Supreme Court
• Parties: THE STATE OF NEW JERSEY, DEFENDANT IN ERROR, v. HENRY C. STENECK AND GEORGE W. STENECK, PLAINTIFFS IN ERROR

192 A. 381

118 N.J.Law 268

STATE

v. STENECK et al.

No. 3.

Supreme Court of New Jersey.

May 19, 1937.

Syllabus by the Court.

1.When, pursuant to the provisions of section 16 of the Trust Company Act(4 Oorap.St.1910, p. 56C1), the commissioner of banking and insurance has called for a report of the condition of a trust company as of the close of business on a given day, the' executive officers of the company are responsible for the truth of the statements contained in the report voluntarily signed, verified, and attested by them, knowing what it was, although such report was prepared by another, unless they show that they were deceived without undue fault on their part; and uncontradicted evidence that the report was false and that they signed and delivered it without examining it, and in entire disregard as to whether it was true or false, justifies the finding by the jury of knowledge of falsity or willfulness and intention to deceive essential to sustain a conviction pursuant to section 17 of the act, as amended by P.L.1929, p. C99 (Comp.St.Supp.1930, § 221—17).

2.In the trial of a criminal case, it is always the right and often the duty of the trial judge to, comment upon the evidence and to say how the testimony strikes his mind, and such comments, even though interrogative and argumentative in character, will not lead to a reversal so long as he is careful to avoid controlling the jury by binding instructions and instructs them that it is their right and duty* to decide for them selves all disputed questions of fact.

3.On the trial of an indictment charging executive officers of a trust company with subscribing and exhibiting to the com missioner of banking a false report of the condition of the company in violation of section 17 of the Trust Company Act, as amended byP.L.1929, p. 699(Comp.St.Supp. 1930, § 221—17), since it was incumbent up on the state to prove knowledge of falsity or willfulness and an intention to deceive the commissioner, it was proper for the state to resort to circumstantial evidence, and where knowledge and intention to deceive was denied or disputed by the defendants, the state had the right to affect their credibility by proper cross-examination and by proof of defendants' opportunities to know that the re port which they signed was in fact false, and to show their motive and their interest in the trial.

4.Several offenses forming parts of a series of acts evincing a continuous state of mind in the defendants and culminating in the criminal act for which they were indict ed are admissible in evidence upon the trial of such indictment.

5.It is clearly the right of the trial judge to suspend a trial of a criminal case for the purpose of examining jurors as to possible bias or prejudice resulting from an alleged attempt by an unidentified person to bribe one or more of the jurors.

6.The direction of a mistrial in a criminal case rests in the sound discretion of the trial judge, and is to be exercised only in extraordinary and striking circumstances in order to prevent a failure of justice.Since it rests in discretion, a strict bill of exceptions will not lie to its refusal, nor can it be availed of under section 136 of the Criminal Procedure Act(2 Comp.St.1910, p. 1863) unless its refusal resulted in manifest wrong or injury.

7.In determining upon the accuracy of an Instruction to the jury, it is not permissible to extract a single sentence and construe it without regard to the context in which it appears.The entire charge must be read and considered as a whole in order to determine whether there was error prejudicial to the defendants.

Error to Court of Quarter Sessions, Hudson County.

Henry C. Steneck and George W. Steneck were convicted of violation of the Trust Company Act by subscribing and exhibiting to the commissioner of banking and insurance a false report of the condition of a trust company with intent to deceive the commissioner as to the condition of the company, and they bring error.

Affirmed.

Argued January term, 1937, before TRENCHARD, BODINE, and HEHER, JJ.

John G. Flanigan and Alexander Simpson, both of Jersey City, for plaintiffs in error.Daniel O'Regan, Prosecutor of the Pleas, and Atwood C. Wolf, Asst. Prosecutor of the Pleas, both of Jersey City, for defendant in error.

TRENCHARD, Justice.

The plaintiffs in error, Henry C. Steneck and George W. Steneck(herein called defendants), were convicted upon an indictment charging a violation of section 17 of the "ActConcerning Trust Companies"(4 Comp.St.1910, p. 5661, as amended byP.L.1929, c. 298 p. 699 [Comp. St.Supp.1930, § 221—17]) in that they willfully, unlawfully, and knowingly subscribed and exhibited to Frank H. Smith, then commissioner of banking and insurance, a certain paper, being a report in writing of the condition of the Steneck Trust Company as at the close of business on March 25, 1931, which report of condition was false and untrue, and was so subscribed and exhibited with intent to deceive the commissioner as to the condition of the company.

The defendants assign errors and specify causes for reversal pursuant to section 136 of the Criminal Procedure Act(2 Comp.St.1910.p. 1863).

At the trial it appeared that the Steneck Trust Company was incorporated under the "ActConcerning Trust Companies" on April 13, 1914, and opened for business in the city of Hoboken immediately thereafter.John Steneck, its founder, died in the early twenties, and left his sons and family in control.One son, the defendantHenry C. Steneck, succeeded to the presidency and became the guiding head.The evidence tended to show, without substantial dispute, that he"ran, managed and supervised" the company, and the other son, the defendantGeorge W. Steneck, was vice president, and, among other things, largely had charge of the buying and selling of the stocks, bonds, and other securities for the company, and it was proved, if not expressly admitted, that the directors "did not run the bank."In fact, the evidence tended to show that the Steneck Trust Company was a strictly family affair and that its management and affairs were rigidly controlled and dominated by Henry C. Steneck, assisted by his brother George.

The proofs show that a "call" was sent out to all trust companies within this state to render to the banking commissioner a true report of conditions as at the close of business March 25, 1931.The authority for issuing this call is contained in section 16 of the Trust Company Act(4 Comp.St.1910, p. 5661).The forms for these reports of condition are prescribed and furnished by the commissioner, and the act provides that they must be verified by the oaths of the president or vice president and the secretary or treasurer of each trust company, and attested by the signatures of at least three directors.Every such report must "exhibit in detail and under appropriate heads the resources and liabilities * * * at the close of any day past specified by the Commissioner, and shall be transmitted to him within twenty days after the receipt of the request or requisition therefor by him."It must also be published at least once in a local newspaper, and proof of such publication must be affixed to the report when filed.

The penalty for filing a false report is set out in section 17 of the act, as amended (Comp.St.Supp.1930, § 221—17), which provides:

"Every incorporator, stockholder, director, officer, agent or clerk of any trust company or proposed trust company who wilfully and knowingly subscribes or makes any false statement of facts, or any false oath or affidavit, or false entries in the books of such trust company, or proposed trust company, or knowingly subscribes or exhibits any false paper with intent to deceive any person authorized to examine as to the condition of said trust company, or wilfully or knowingly subscribes to or makes any false report, shall be guilty of a high misdemeanor, and punished accordingly."

The "Statement of Condition of the Steneck Trust Company" so called for was signed and sworn to by Henry C. Steneck, president, and was attested by George W. Steneck, a director (among others), on April 7, 1931, and was published in a local newspaper on April 8, 1931, and on April 10, 1931, it was received and filed in the office of the commissioner of banking at Trenton.

The indictment charged, and it was proved at the trial without any contradiction, that Schedule G of this report was false and untrue.The evidence tended to show that the defendantsHenry C. Steneck and George W. Steneck knew it was false and untrue in the following vitally material and highly important particulars, viz.: The market values of the company's stocks and securities as of March 25, 1931, were misrepresented and falsely overstated to the extent of $742,837.64.The report admitted a shrinkage of only $241,289.45 in the market value of the securities, but it should have disclosed a total shrinkage of some $984,127.09.Had this true figure been disclosed, it would have led to the immediate closing of the trust company's doors by the commissioner of banking pursuant to section 22 of the act(as amended byP.L. 1913, p. 282[Comp.St.Supp.1924, § 221— 22]).Had its true condition been reported, it would have disclosed that the item of $250,000 of undivided profits was wiped out, the surplus of $500,000 would have likewise disappeared, and the capital of $1,000,000 have been shown to have been impaired to the extent of $234,127.09.

Because the true condition was thus fraudulently concealed from the commissioner, the trust company was not closed until two and one-half months later when banking examiners were making their regular semiannual audit, and meanwhile, during the period from April 10, 1931, when the false "call" report was filed, to June 27, 1931, when the doors were finally closed, approximately 467 new special or savings accounts, and 97 new checking or commercial accounts were...