People ex rel. Hegeman v. Corrigan

Section 148 of the Code of Criminal Procedure provides that when an information is laid before a magistrate of the. commission of a crime he must examine the informant or prosecutor and any witnesses he may produce, take their depositions in writing, and cause them to be subscribed by the parties making them. Section 149 provides that the deposition must set forth the facts stated by the prosecutor and his witnesses tending to establish the commission of the crime and the guilt of the defendant. Section 150 provides that if the magistrate be satisfied therefrom that the crime complained of has been committed, and that there is reasonable ground to believe that the defendant has committed it, he may issue a warrant of arrest. To justify the magistrate in issuing the warrant, therefore, it must appear from the depositions of the prosecutor and his witnesses taken before him that a crime had been committed, and that there is reasonable ground to believe that the defendant has committed it. Section 2015 of the Code of Civil Procedure provides that:

“A person imprisoned or restrained in his liberty, within the state, for any cause or upon any pretence, is entitled * * * to a writ of habeas corpus, or a writ of certiorari, as prescribed in this article, for the purpose of inquiring into the cause of the imprisonment or restraint, and, in a case prescribed by law, of delivering him therefrom.”

Section 2031 of the Code of Civil Procedure provides that:

“The court or judge before which or whom a prisoner is brought by virtue of a writ of habeas corpus, issued as prescribed in this article, must, immediately after the return of the writ, examine into the facts alleged in the return, and into the cause of the imprisonment or restraint of the prisoner; and must make a final order to discharge him therefrom, if no lawful cause for the imprisonment or restraint or for the continuance thereof is shown; whether the same was upon a commitment for an actual or supposed criminal matter or for some other cause.”

If, therefore, it appeared that the depositions upon which the magistrate issued the warrant did not tend to establish the commission of a crime, it was the duty of the court before whom the person was brought to sustain the writ and discharge the prisoner; and, necessarily, the fundamental question presented on this appeal is whether, upon the depositions presented to the magistrate, there was proof that a crime had been committed.

The crime charged against the relator was that of perjury in the verification of a report made by the Metropolitan Life Insurance Company to the Superintendent of Insurance in the state of New York in January, 1905. The Metropolitan Life Insurance Company was originally incorporated on January 2, 1866, under the name of the National Travellers’ Insurance Company, with a capital of $200,000. Its charter was amended by chapter 286, p. 539, of the Laws of 1867; chapter 49, p. 58, of the Laws of 1868, when the name of the corpora

“State of New York, County of New York—ss.: John It. Hegeman, President, and James S. Roberts, Secretary, of the Metropolitan Life Insurance Company, being duly sworn, each' for himself deposes and says that they are the above described officers of said company, and that on the thirty-first day of December last all the above described assets were the absolute property of the said company, free and clear from any liens or claims thereon except as above stated; and that the4 foregoing statement, with the schedules and explanations herein contained, annexed or referred to, are a full and correct exhibit of all the assets, liabilities, income and disbursements and- of the condition and affairs of the said company on the said thirty-first day of December last, and for the year ending on that day, as the same were in fact and as the same are shown by the books of the company, and that the foregoing declarations and answers are true, according to the best of their information, knowledge and belief, respectively.”

This was signed by the relator and the secretary of the company and sworn to before a notary public.

The crime charged in the deposition taken before the magistrate was that the relator had committed the crime of perjury, under the following circumstances: That the Metropolitan Life Insurance Company was, subject to the provisions of the insurance law, required annually on the 1st day of January, or within two months thereafter, to file in the office of the Superintendent of Insurance a statement, verified by the oath of at least two of the principal officers of the said corporation, showing its condition on the 31st of December then next preceding; that such statement should be in such form and should contain such matters as the superintendent should prescribe; that on the 26th day of January, 1905, the relator personally appeared before a notary pub-

“whereas, in truth ana in fact, the statements contained in the said annual statement, and more particularly in the said schedule headed ‘IV.—Ledger-Assets,’ were not true, as the said John R. Hegeman then and there well knew, in that on the said 31st day of December, 1904, there was owing to the Metropolitan Life Insurance Company the sum of $1,492,875 because-of loans theretofore made by the said Metropolitan Life Insurance Company to various persons, firms and. individuals, upon the pledge by said persons, firms and individuals with the said Metropolitan Life Insurance Company of certain bonds, stocks and other collateral, as will more fully appear from the affidavits of Henry W. George, Frederick H. Ecker and William A. Read, hereto annexed and made part hereof.”

The charge is thus based upon the falsity of this statement that there was owed to the Metropolitan Life' Insurance Company no moneys because of loans made by the said Metropolitan Life Insurance Company upon the pledge with it of bonds, stocks, or other collaterals. If, therefore, as a fact, on the 31st day of December, 1904, it did not appear from the depositions submitted that there was due to the Metropolitan Life Insurance Company any amount because of such loans, it is quite evident that there was no evidence before the magistrate that a crime had been committed, and the magistrate was not,, therefore, under the provisions of the Code of Criminal Procedure to which attention has been called, authorized to issue a warrant for the arrest of the relator. And as the depositions upon which the magistrate had acted were before the court for review under the writ of certiorari, the relator was entitled to have that question determined.

In the depositions taken before the magistrate it appeared that for upwards of 15 years it had been the policy of the Metropolitan Life Insurance Company not to make any return of loans made upon the pledge with it of bonds, stocks, or other collaterals. In order to enable the officers of the company to make a truthful report without showing that the insurance company had made any such loans, it had been the custom of the company to transfer all of these loans it had made to the firm of Vermilye & Co., a firm of bankers doing business in the city of New York, against whose responsibility no suggestion is made. Vermilye & Co. were bankers of the insurance company, having a deposit account with them, and this firm transacted its business in relation to the purchase and sale of securities. On the 30th of December in each year during which this custom had been in vogue,

“Gentlemen: Enclosed herewith find cheque to your order for $1,401,-943.25, for which please return us by bearer the Syndicate papers deposited with you on the 30th ultimo.”

Similar correspondence passed between the company and the relator in relation to this transaction for December, 1903, and January, 1904. On December 30, 1904, the relator wrote to Vermilye & Co., inclosing a check for $750,000 to be placed to the credit of the company’s deposit account, and adding:

“Eor the accompanying package please send us your $1,492,875. We will reverse this transaction according to understanding, on Tuesday, January 3rd, 1905.”

And on January 3, 1905, the insurance company sent its check for the same amount to Vermilye & Co. with a request that Vermilye & Co. return by bearer the securities delivered to them on December 31st. Yermilye & Co. thereupon returned the securities received by them to the relator, and at the same time submitted a statement of the charge for interest from December 30th to January 3d, amounting to $497.63, which the insurance company paid.

It was claimed by the learned district attorney, as -the basis of his charge, that the statement verified by the relator was false; that, notwithstanding this transaction, the insurance company never ceased to be the holder of these loans secured by these collaterals; and that therefore the statement made in the return to the insurance department that it held no loans secured by the collaterals mentioned was a false statement, and the affidavit verifying this as a true statement was perjury. It is undoubtedly true that neither the insurance company nor Vermilye & Co. expected this transaction to result in a permanent transfer by the insurance company to Vermilye & Co. of these loans. It might be that, as between the persons borrowing this money and the insurance company, such a transaction could be regarded as a conversion of the securities held to secure the loan; but it is apparent that there was an actual completed transaction by which the insurance company had transferred the loans and the collateral held to secure them to Vermilye & Co., and had received from Vermilye & Co. the amount due to the insurance company thereon.' Thus the relation of the insurance company to the borrowers had changed. It did not hold the loans secured by the collaterals, for it had received the amount that it had loaned, and Vermilye <& Co. then became the creditor and had in their possession the securities pledged to secure the loans. It does not appear that Vermilye & Co. were under any obligation to return these loans to the insurance company;.but undoubtedly that return was contemplated by both parties to the transaction, and if either party had refused to carry out this contemplated transaction in January I do not see that the party in default would have been liable except for the damages sustained. Wheeler v. Allen, 51 N. Y. 37 ; Nat. Bank v. Rogers, 1 App. Div. 623 , 37 N. Y. Supp. 365 . A payment by the debtors to Vermilye & Co. would have discharged the loans, and a payment of the amount due to the insurance company by a debtor

From the facts as they appeared before the magistrate, there can be no question but that the relator honestly believed he was making a true statement of the actual condition of the company on the 31st of December, 1904, and as an actual fact the statement that was made and that the relator verified was a true statement. Perjury is defined by section 96 of the Penal Code to be:

“A person who swears or affirms * * * that any testimony, declaration, deposition, certificate, affidavit or other writing by him subscribed is true, * * * on any occasion in which an oath is required by law * * * willfully and knowingly testifies, declares, deposes or certifies falsely, in

any material matter, or states in his testimony, declaration, deposition, affidavit or certificate, any material matter to be true which he knows to be false, is guilty of perjury.”

To sustain that charge, therefore, it must appear that the relator deposed falsely. If, as a matter of fact, the statement contained in the report was true, he did not depose falsely; and it would appear that upon the undisputed evidence the statement contained in the report was true, and, therefore, it would seem to follow that the crime of perjury was not committed. It is not necessary that we should characterize the acts of the relator in carrying through this transaction. It had been a practice adopted for many years, and while the effect of it was to deceive the insurance department, it certainly does not appear that the company did lose, or could lose, assuming the responsibility of Vermilye & Co., anything by the transaction. Whatever the motive may have been, and whatever offense such a transaction may involve, all that we have to do upon this appeal is to determine whether or not, upon these depositions submitted to the magistrate, there was evidence that the crime charged had been committed. As it seems that the statement that was made was actually true, it must follow that the relator cannot be held for perjury in swearing to it; and as the depositions before the magistrate, instead of proving that the crime of perjury had been committed, quite conclusively proved that that crime had not been committed, he was not justified in issuing the warrant.

It follows that the order appealed from must be reversed and the relator discharged.

MCLAUGHLIN and HOUGHTON, JJ„ concur.

I concur in the reversal of the order dismissing the writs of habeas corpus and certiorari and remanding the relator to the custody of the respondent Beery, but I am not convinced that the principal reason for a reversal assigned in the opinion of Mr. Justice INGRAHAM should control. I do not think it is established by the affidavits upon which Mr. Corrigan, the city magistrate, acted in issuing his warrant, or that the evidence which was presented to him shows that as matter of fact there was an out and out sale of the securities by Mr. Hegeman to Read & Co. I am unable to adopt the conclusion that as matter of law the year-end transactions of 1904, by which the loans of the Metropolitan Life Insurance Company and the collaterals to secure such loans were turned over to Read & Co., constituted an actual sale.

Notwithstanding that situation, it seems to me that the affidavits and evidence before the city magistrate were not sufficient to establish prima facie the charge of perjury made against Mr. Hegeman. The affidavit annexed to the annual statement for the year ending December 31, 190L and which was verified by Mr. Hegeman, was made upon information and belief, as is alleged in the deposition of Flood, who preferred the charge. The charge is:

“That the said John R. Hegeman, in the county of New York, on the 26th day of January, 1905, in the manner and form aforesaid, feloniously, willfully, knowingly, falsely, and corruptly committed perjury. * * *”

It is established by affidavits that the transaction was of a similar character to others which had been had for 14 previous years, and that it was regarded by the officers of the insurance company and by the transferees of the loans and securities as being an actual sale. The essential requirement to constitute the offense of perjury is that the inculpated party must knowingly and willfully testify or depose to a falsehood. If he believes the fact to be true, although it may be false, he certainly is not guilty of the crime of perjury; and here, it seems to me, the evidence before the city magistrate and upon which he should have acted shows that Mr. Hegeman really believed that, by making the transaction with the firm of Read & Co., there was a bona fide disposition of the loan accounts and of the securities made in accordance with a custom of his company which had obtained for many years and which was not intended to deceive or misrepresent, but merely to save the company from the importunity of borrowing brokers.

I am of the opinion that the evidence was insufficient to establish prima facie willful and deliberate perjury of Mr. Hegeman. On the contrary, there was enough to show satisfactorily that such willful and deliberate perjury had not been committed. I fully concur in the expression of Mr. Justice INGRAHAM in his opinion that, “from the facts as they appeared before the magistrate, there can be no question but that the relator honestly believed he was making a true statement of the actual condition of the company on the 31st of December, 1904.” Therefore, I concur in a reversal of the order.

CLARKE, J., concurs.