State v. Yegen

• Decision Date: 18 July 1925
• Docket Number: 5710.
• Citation: 238 P. 603,74 Mont. 126
• Parties: STATE v. YEGEN.
• Court: Montana Supreme Court

238 P. 603

74 Mont. 126

STATE v. YEGEN.

No. 5710.

Supreme Court of Montana

July 18, 1925

Appeal from Judicial Court, Silver Bow County; Jeremiah J. Lynch Judge.

Christian Yegen was convicted of receiving into a bank a deposit when bank was insolvent, and he appeals. Reversed and remanded.

Canning & Geagan, of Butte, for appellant.

L. A Foot, Atty. Gen., and I. W. Choate, Asst. Atty. Gen., for the State.

HOLLOWAY J.

By an information filed in the district court of Silver Bow county Christian Yegen, Peter Yegen, and Barton B. Dakin were charged with the commission of a felony-receiving into the bank of Yegan Bros., bankers, at Butte, a deposit of $190 at a time when the bank and the partners doing business as Yegen Bros. were insolvent. Christian Yegen was tried separately and was convicted and sentenced to imprisonment in the penitentiary for not less than 2 years nor more than four years. He has appealed and predicates his right to a reversal of the judgment and order denying him a new trial upon 30 assigned errors. The assignments which require special consideration may be grouped conveniently under 5 heads. Christian Yegen will be referred to as defendant.

1. The state charged and undertook to prove that the bank conducted at Butte, under the designation "Yegen Bros., Bankers," was an unincorporated, private bank, owned and controlled by Christian Yegen and Peter Yegen, partners who did business under the name Yegen Bros.; that Barton B. Dakin was the agent of the partners and the cashier and manager of the Butte bank; that on February 14, 1924, the partners and Dakin received into the bank for deposit $190, the property of Mrs. F. E. Renick, and that the bank and the partners were then insolvent.

The principal burden imposed upon the state was to prove the insolvency of the partners at the time the deposit was received, and a very material portion of the evidence, offered to establish the fact of such insolvency, is contained in three exhibits (16, 17, and 18), which fill more than 400 pages of the record before us.

Exhibit 16 is entitled: "Examiner's report of condition of Yegen Bros., Bankers, Butte, Montana, at the close of business on February 14, 1924, date of closing." This report was prepared by C. M. McCoy.

Exhibit 17 is entitled: "Yegen Bros., Bankers, Billings, Montana." It purports to be a report upon the financial condition of Yegen Bros., Bankers, at Billings, Mont., at the close of business February 15, 1924, and was prepared by A. L. Ritt.

Exhibit 18 is entitled: "Examiner's report of the condition of Yegen Bros., Bankers, Gardiner, Montana, closed February 15, 1924, and taken in charge by the state banking department at 10:40 a. m. February 16, 1924." This report was prepared by F. W. Bleck. McCoy, Ritt, and Bleck were deputies in the office of L. Q. Skelton, state examiner.

Mr. Skelton testified that he sent McCoy to Butte, Ritt to Billings, and Bleck to Gardiner, to examine the respective banks; that he received these reports in the usual course of business and transmitted them to the Governor. He explained the method of conducting the business of his office and the usual procedure followed in making bank examinations.

John Allen, the secretary to the Governor, produced the reports, and testified that they were received from the state examiner, were filed, and were then deposited in a vault in the Governor's office. Neither McCoy, Ritt, nor Bleck was called as a witness, and no one of the reports was verified or even signed. Upon this showing alone the reports were admitted in evidence over the objections of defendant, and the court then instructed the jury in the language of section 10570, Revised Codes, that-

"Entries in public or other official books or records, made in the performance of his duty by a public officer of this state, or any other person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts stated therein."

Since there were not any other documents introduced to which this instruction could be applicable, it is apparent that the trial court proceeded upon the theory that these reports are public writings and therefore they were admissible and prove their contents. Counsel for defendant challenge the correctness of the trial court's conclusion that the reports are public writings.

Section 10540, Revised Codes, declares:

"Public writings are: 1. The written acts or records of the acts of the sovereign authority, of official bodies and tribunals, and of public officers, legislative, judicial, and executive, whether of this state, of the United States, of a sister state, or of a foreign county. 2. Public records, kept in this state, of private writings."

Section 10541 provides:

"All other writings are private."

Section 10544 provides:

"Public writings are divided into four classes: 1. Laws. 2. Judicial records. 3. Other official documents. 4. Public records, kept in this state, of private writings."

These reports are not laws, judicial records, or public records kept in this state of private writings, and, if admissible in evidence as public writings, it is because they are included in class 3-"other official documents."

The evidence contained in the reports is hearsay within every recognized definition of that term. Neither Mr. Skelton, who identified the reports, nor Mr. Allen, who produced them, nor any other witness for the state, assumed to know anything concerning the accuracy of the statements which appear in them. The probative force of the statements depends altogether upon the competency and credibility of the deputies who prepared the reports.

It is the general rule that hearsay is not admissible, but there are some exceptions to the rule, as well established as the rule itself, and one of these exceptions is that relevant official statements are admissible without confirmation of their authenticity by the usual tests for determining the truth, viz. the examination and cross-examination of the persons by whom the statements are made. Included in the official statements comprehended by the exception are all of the public writings enumerated in class 3, section 10544 above, except such confidential communications as are excluded by subdivision 5, § 10536, Revised Codes, upon the ground of public policy.

It follows then that, if these reports are public writings within the meaning of the statute and are not excluded as confidential communications, they were admitted properly under the provisions of subdivision 6 of section 10568, and, on the contrary, if they are not public writings they fall within the general rule which excludes hearsay. Whether they are public writings must depend upon the character of the reports and the terms of the statute under which they were prepared.

Each of the exhibits in question purports to contain an itemized statement of the resources and liabilities of the bank to which it refers. The principal items which constitute the resources of each bank are loans, bonds, stocks, and warrants, banking house furniture and fixtures, other real estate, cash on hand, and amounts due from other banks. In each report the loans are classified as "good," "doubtful," or "loss," a valuation is placed upon each item constituting the resources, and each report contains comments made and opinions expressed by the deputy who prepared it. Examples from the report will serve to illustrate the character of evidence under review. Out of consideration for the borrowers whose notes are classified as worthless, we omit the names, and refer to the loans by the numbers employed in the reports:

------------------------------------------------------------------------------- Name of Borrower. Amount Good. Doubtful. Loss. Loaned. ------------------------------------------------------------------------------- (1) ..................... C/M 419c: 110h: 4867 sheep. Wool sold, 123,670 85,080 12,000 26,590 payment not yet received, approximately $12,000. No statement. (15) ..................... Unsecured. Works for Ryan Fruit Co. 200 200 (23) ..................... Unsecured. Attorney. 100 100 (4) ..................... Unsecured. Maker gone. Bank holds 579.46 579.46 collateral note of about 1,400 which is held by Bank of Boulder for collection and signed by Clark. Have no other information. (19) ..................... Unsecured. Loans made by former cashier 16,756.31 16,756- W. L. Kearns who is now working for .31 the Glengary Mining Co. Loans due in Dec. 1921. Mine not working. Is located at Cooke City. Are now putting mine in shape to start operating in the spring. Not sufficient information on hand. Looks like a very bad deal. (23) ..................... Unsecured. Works for government at 300.00 300.00 Mammouth. Has good reputation. Considered good. -------------------------------------------------------------------------------

Concerning the furniture and fixtures of the Butte bank, the report (Exhibit 16) says:

"Carried on books at $21,374. The bank was refurnished about one year ago. The railings are of mahogany vanier [veneer] with marble bases. Copper grilling. Vaults and equipment with the usual machines, desks, etc. Appear to be carried at a fair value, but, realizing the difficulty of disposing of part of this class of equipment, it would seem fair to reduce this figure to $15,000. Loss $6,374."

By this process it was made to appear that the Butte bank had suffered losses aggregating $198,092.44, the Billings bank $146,423.45, and the Gardiner bank $30,156.52; that the doubtful loans in the Butte bank amount to $100,185.40, in the Billings bank to $55,428.39, and in the Gardiner bank to $28,098.97; and that the capital investment of each bank had been wiped out completely by the...