PEOPLE v. STOKES

PEOPLE v. STOKES. N. Y. General Sessions ; June, 1893. 1. Indictmentl\ The validity of an indictment is not affected by the fact that it was procured upon the testimony of a witness who had been convicted of a felony; since by Penal Code, § 714, a person convicted of a felony is made a competent witness in any cause or proceeding, civil or criminal, leaving his conviction to be proven against him to affect his credibility. 2. Libel; criminal.] Libel is prosecuted and punished as a" crime / for the reason that it tends to provoke animosity and violence and to disturb the public peace and repose; it makes no difference, therefore, whether the person libeled is of good or bad reputation. 3. Indictment; libel.\ Although it appears from the alleged libel itself, which is set forth in the indictment under a general allegation that it was maliciously published, that it is a communication between persons interested in if within Penal Code, § 253, providing that such a communication is presumed not to be malicious and is privileged, it cannot be determined on 'demurrer that the communication was privileged ; since the presumption that it was published without malice is disputable, and the court cannot find as a matter of law without evidence that the statements in the communication are true and were published in good faith.—So held, where the libel set forth in an indictment was contained in a letter which purported to be a communication from a stockholder to officers of the corporation, charging one of them with misappropriation of corporate funds. 4. The same.\ Where an indictment for libel avers generally that the alleged defamatory matter was published concerning the complainant, it is sufficient on demurrer although it does not clearly appear from the alleged libel itself that it referred to him. 5. The same.~\ If there is a sufficient doubt as to whether the alleged defamatory matter in an indictment for libel (set forth without explanation) is libelous per se to make it a question of fact for the jury,—a demurrer to the indictment will not be sustained. 6. Forms.] Form of an indictment for libel. Demurrer to an indictment for libel, and also a motion to dismiss the same. The indictment was found against William E. D. Stokes and William R. Martin, for the libel of Edward S. Stokes, and its allegations are substantially as follows : “ The grand jury of the city and county of New York, by this indictment, accuse William E. D. Stokes and William R. Martin of the crime of publishing a libel, committed as follows: “ The said (defendants) both late of (etc.) on the thirtieth day of June, in the year of our Lord one thousand ■eight hundred and ninety-two, at the city and county aforesaid, unlawfully and maliciously contriving and intending to vilify and defame one Edward S. Stokes, then being an officer, to wit: the president of a certain corporation known as the ‘ Hoffman House,’ and to injure and ■aggrieve him, the said Edward S. Stokes, unlawfully and maliciously did publish, and cause and procured to be published, a certain false, scandalous, malicious and defamatory libel of and concerning the said Edward S. Stokes, which said libel exposed the said Edward S. Stokes to hatred, contempt and obloquy, and tended to cause him to be shunned and avoided, and had a tendency to injure him in his business and occupation, the same being in the form of a letter addressed to the said Edward S. Stokes, (as being then and there the president of the said corporation) by the name and description of ‘ E. S. Stokes, Esq., President,’ and to one Geo. W. Cornish', (then being the-secretary of the said corporation) by the name and description of ‘ Geo. W. Cornish, Secretary,’ containing the-false, scandalous, malicious, and defamatory words and matter following of and concerning the said Edward S,. Stokes, that is to say : “ New York, June 30, 1892. “ E. S. STOKES, Esq ., President. ■ “ Geo. W. CORNISH, Secretary, Hoffman House. •“ Gentlemen : “ I received on the 27th Mr. Cornish letter of the 25th. inst., written at the direction of the president, and learn that President Stokes refuses to call a special meeting of' the directors of the corporation to inquire among other things, ‘what course should be taken with officers who-have taken the company’s funds and not returned them,’' because he infers that he is the one who misappropriated the funds. This is a broader admission than I supposed', he would make in writing, but he is mistaken in thinking-that he can get out of it by refusing to allow the directors-to meet and investigate it. It is well for him that he is-awake to the fact, and sees that it is important to make restitution of what he has taken from the company before. the board meets, though not in the way he proposes in your letter, by making other false credits, to wit, his restaurant bills, $15,048.92 ; a claim for salary, amount not stated ; ‘ thousands of dollars ’ he claims he has paid out and not charged ; $12,750 for interest on bonds, and $25,000 for bonds he wishes to pay in as cash. He must promptly pay back in cash...... “The president has stated that at least $7,500 was stolen from Claremont, and that the account books had been stolen also. . . Why was it this was never charged against Fisher to his face, and nothing was done but a petty prosecution for $4.80 ? Is this like the old story told to Mackay about the former cashier, L. B„ Smith, and his theft of the books, and $200,000 defalcation and nothing in it ? “ Where, too, are the missing profits of the down-town restaurants ? The president said they were $23,000 and more a year, until the accounts were called for in December, 1891. Then they were conveniently made to disappear into some small sum reached by guesswork. In whose pockets are these profits? Why had not inquiry been made into these losses ? Has the president stopped this also? .... “ All this was a very ingenious plan to parry my inquiries as to what had become of the profits, which ought to be on hand for the January dividend; but it did not work, for it is difficult, when books are absolutely correct, as you say, to make way with the -money and then render accounts. But the explanation came out when he sent for me, and in the presence of Mr. Martin, m his private room, frankly confessed that the reason v hy Mr. Plainer could not make out the accounts was, thac he had taken $27,000, which was not entered in the books, and that he would make restitution from the Jar.vary interest, and straighten out the account.,, and send chem to me, and asked me as a favor not to bother him until then and until the Maclcay suit was over. I thought Plainer should make out a special report to the board, how this $27,000 was taken out without appearing on the books and whether and how it was restored. This would open a new page in the books. “ Mr. Plainer is now again keeping back the accounts which I have often demanded, and now demand again, although he knows they are needed in determining on the July dividend as the by-laws require, article XI, and I am • much interested in watching what new plan will be devised for making the profits disappear, so that there can be no dividend, and yet keep the books ‘ absolutely correct,’ particularly since- President Stokes is now awake to the danger of misappropriating the funds. “ Since the president relies on the votes of two of .the directors, Mr. Foote and Mr. Cornwell, to support him in the use he makes of the corporation funds, I have inquired here, and at Red Bank, New Jersey, from the highest authority, and I find they are each of them possessed of property, and adequately responsible as guarantors of the president, and I repeat the notice that I gave at the May directors’ meeting, that I will enforce this liability against them. “ In respect to the Croton taxes, which were unpaid, I would like a copy of the 1 satisfactory explanation ’ which you say in your letter has been made. Was it satisfactory to Mr. Harris, the attorney of the Livingston Estate, so that proceedings to forfeit the lease are suspended. It has often been stated by you each that all these taxes were paid, and I' would like an explicit answer to my question, what other taxes or water rents remain unpaid ? “ Will the president give a detailed statement of the ‘ several thousand dollars in cash ’ which you say in your letter has been paid out for the benefit of the company, and at the same time, of all the money which the company has paid out for his benefit. “ Will he also state the grounds on which, as you say in your letter, he claims a credit for his restaurant services, $15,048.92, and what right he has to take twenty-three dollars a day at the restaurant, and whether it includes his friends. What other persons now or does he propose to put on the free restaurant list ? I have always paid my restaurant charges, even when he was dining with me. He agreed, as he wrote to me, to pay for his rooms and restaurant charges, and I and Mr. Reed were to pay ours. “What salary do the majority of the directors propose to give the president ? “ Do they know that he agreed with me that he was to have no salary before August, 1891, and after that, in writing under a sealed agreement, he was to receive $400 a month, and he also agreed in writing to make no changes in the business without my.consent. “ I shall object to any payment being made to the president for the coupons which he does not hold, and which he does not surrender, and where payments have been made to him for coupons which have not been surrendered, I claim that the money shall be paid back by him. “ I claim that the money to pay the coupons on the $125,000 bonds I hold can be paid only to me. “ These are adroit ways to reduce the balance which has been standing so long against him for moneys of the company which he has taken without authority, turning a large balance in his favor, exhausting the profits which should belong to the company, and enabling him to take all its money himself before reaching any dividend. The two directors who aid him in their illegal schemes of depleting the treasury will be held liable for it. “ Or, do you mean to tell me by your letter that there has been a meeting of the directors without notice to me, and the two directors and the president have agreed on these ways of fixing up his account. Your positive language looks very much like it. “ Besides the small amounts held by Mr. Foote and Mr. Cornwell all the capital stock is held by the president, Mr. Read and myself. The shares which I hold, and those of . Mr. Read which are pledged to me, are very nearly one half of the whole. I also hold $125,000 of bonds with the coupons as security for my loans to him and for his other obligations and guarantees to me. He is resorting to all the devices of bookkeeping, with the aid of Mr. Plainer and Mr. Cornish, to turn all the profits in his own pockets, so that nothing shall be left for dividends. His personal account through which all the money passes, which amounts to over a million, yet no interest is charged upon it. This is worse than illegal, but Mr. Foote and Mr. Cornwell are good guarantors, and the legal methods of dealing with mismanaged corporations, and holding the officers and clerks to their responsibilities, are notably prompt and severe. “ The president is indebted to Mr. Read for all present position, for Mr. Read owned the whole business when he admitted him to the partnership. When he was on trial for his life Mr. Read befriended him with money and personal efforts. The president has in his hands all the bonds that came to Read, and which Read claims belongs to him. I will not be a party to anything that looks like wronging Mr. Read or any one else. I aided him two years ago on his appeal for money because he was in extreme distress, yet he refuses to pay back the money to him, and withholds the dividends on the stock owned by Mr. Read and by me. When he was on trial for his life I worked for him, and induced my father to advance very unwillingly, and after he had denied the appeals of his own father, the money that went towards the expense of his trial and saved his life so that he can be where and what he is to-day. That account against him stands on the books of my father’s estate at $64,629.89, and to this day he has never repaid the first dollar of it. “ He is carrying too far his course of injustice and violation of law. In times past he has had hundreds of thousands of dollars in addition to the sums of his personal account on the books of this company. His own friends are asking me where does his money go to. Is it his dredge, his outside speculations and gambling,.or horse racing? ’ Where does it go to ? “ I write this with regret, but I am not willing to stand by and see a corporation mismanaged, and fail to give notice to my associate directors. I have been all these years my cousin’s friend, and I have never done him anything but kindnesses. “Yours respectfully “ W. E. D. Stokes. ■ “ I unite in the foregoing letter. “ W. R. Martin, Director.” The defendant, William E. D. Stokes, demurred -separately to the indictment on the grounds : (i) That the facts stated do not constitute a crime: (2) That the indictment contains matter, which if- true, would constitute a legal justification or. excuse for the acts charged, or other legal bar to the prosecution. The defendant, William R. Martin, moved to dismiss the indictment upon an affidavit setting forth that Edward S. Stokes, the person libelled, had been convicted of homicide, that upon his testimony the grand jury found the indictment, and that by reason of his conviction for such felony he was disqualified as a witness .and was civilly dead. John D. Lindsay (De Lancey Nicoll, district attorney), for the people upon the demurrer. I. If a communication is as a matter of fact malicious it is not privileged under Code Crim. Pro. §-253. It is only where the communication is made bona Jide and without malice that it is protected. Whether the communication set forth in the indictment in this case was privileged or not, is a question of evidence and not of pleading ; it is a matter which can only be considered upon the trial and is not to be determined upon demurrer (citing Townsend on Libel and Slander, p. 300 ; Whartons Crim. Law, § 1632). II. The allegation in the indictment as to the publication was sufficient. Section 245 of the Penal Code expressly declares that to sustain a charge of publishing a libel it is not necessary that the matter complained of shoiild even have been seen by any person other than the defendant himself. It is enough if the defendant knowingly displayed it, or “ parted with its immediate custody under circumstances which exposed it to be seen or understood by another person than himself.” III. The acts set out in the indictment were indictable because of general malice, and no special purpose or .intent is under the statute, made - a part of the offense ; and such intent need not be alleged (citing Bishop's Directions & Forms, § 620, note 2, p 346). IV. The matter contained in the letter as it appears in the indictment is libellous per se. The words are to be understood in their plain and natural import, according to the ideas they are calculated to convey to those to whom they are addressed. Where the words are capable of two constructions, in which sense they are meant is a matter of fact to be decided by the jury (citing 13 Am. & Eng. Ency. of Law, 328, 392; Beazley v. Reed, 68 Ga. 380 ; Snyder v. Andrews, 6 Barb. 43; Green v. Telfair, 20 Id. 11 ; Cornelius v. Van Slyck, 21 Wend. 70; Goodrich v. Woolcott, 3 Cow. 231; Petsch v. St. Paul Dispatch Printing Co., 41 Northwest. Rep. 1034; Gorham v. Ives, 2 Wend. 536; Suel v. Catlin, 3 Id. 291; Gibson v. Williams, 4 Id. 320; Zeliff v. Jennings, 61 Tex. 458). Upon the motion to dismiss the indictment: I. A motion to dismiss an indictment can not be made on any other grounds than those specified in Code Crim. Pro. §§ 667, 668 (citing People v. Petrea, 92 N.Y. 128, 145). II. Even if it is assumed that the complainant, by reason of his conviction, was disqualified as witness, still as there was other evidence before the grand jury, it must be presumed, in absence of evidence to the contrary, that there was sufficient evidence to warrant indictment. But if it is conceded that the indictment was found without legal evidence, no constitutional'right of defendant would have been invaded. III. Malicious libel is a public offense for which a person may be prosecuted regardless of any consideration as to past career of the person libelled (citing Perry v. Man, 1 R. I. 263). IV. In any case, the fact that complainant was pardoned removes all objections. George H. Adams (.Holmes & Adams, attorneys) for defendant upon demurrer. The communication complained of is privileged, because : (i) It is addressed to a corporation respecting its internal affairs ; (2) The writer is a stockholder and a holder of ten bonds of the corporation, and thus substantially interested in its affairs and its conduct; (3) The writer is a director of the corporation, and thus not only interested, but in duty bound to protect the rights of other stockholders or persons interested in the corporation as to acts of misfeasance and malfeasance of its officers or any of them, and to protest against and expose such acts ; (4) It is a communication to a master, the corporation, respecting acts of the servant, the person libelled, to the prejudice of the master’s business (citing Penal Code, § 253 ; Townsend on Libel and Slander, p. 300 ; Wharton s Criminal Law, 1632 ; Sewall v. Catlin, 3 Wend. 291). IT. The indictment only charges that the alleged libellous letter was “published” in so far as it was sent to the person libelled, or possibly to the corporation in the person of its president (the person libelled). This is a fatal defect, because the gravaman of the charge is that the libel “ exposed ” the complainant to “ hatred and contempt and obloquy, and caused him to be shunned and avoided,” and to injure his business, etc. (citing Rex v. Wagoner, 2 Starkie, 245). III. The communication itself, apart from the privilege, is not libellous, and there is no averment of the intention of the writer by the way of innuendo. Therefore, although Code Crim. Pro. § 289, provides that an indictment for libel “ need not ” set forth any extrinsic facts to show the application of the defamatory matter of the party libelled, yet an indictment is clearly not good without any such averment, if the matter is not per se defamatory, or not so without extrinsic statements, or if, as here, on the face of the letter, the alleged defamatory words may apply to other persons. [MAJORITY — Cowing, J.] Cowing, J. By an indictment filed in this court on the 25th day of April, 1893, the defendants are charged with committing a criminal libel. On the 8th day of May, the defendant, Stokes, filed a demurrer to the indictment, which, if sustained, the defendant, Martin, claims must inure equally to his benefit. The demurrer sets forth two distinct grounds of objection to the indictment.: First. That the facts therein stated do not constitute a crime. Second. That upon the face of the indictment the alleged libelous matter appears to be privileged and therefore not criminal. Upon the argument of the demurrer the counsel for the defendant, Martin, by way of motion, moved to dismiss the indictment, upon the ground that the complainant having been convicted and sent to State prison for a felony, is disqualified to testify as a witness, and is also thereby rendered incompetent to be a complainant in a criminal libel suit. Without passing upon the regularity of the defendant Martin’s motion, I am of the opinion that his objections to the indictment are not tenable. Section 714 of the Penal Code expressly provides that a person convicted of a felony is no longer, as at common law, rendered incompetent to testify as a witness, but this section expressly makes him a competent witness in any cause or proceeding, civil or criminal, leaving his conviction to be proven against him to affect his credibility only. This express provision of law makes it unnecessary for me to refer to the effect a pardon has in restoring a convicted felon to competency as a witness. • A criminal libel is prosecuted in the name of the People, not for the purpose of redressing an injury done to an individual, but is so prosecuted and punished as a crime for the reason that it tends to provoke animosity .and violence and to disturb the public peace and repose ; and certainly it will not be for a moment contended that the threatened danger to the public peace is not as great when the person libelled is a bad man, as when he is a good man. In a civil action brought by an individual to obtain satisfaction for an injury to his reputation, caused by the publication of a libel, the bad reputation of the complainant becomes material as affecting the measure of damages, while in a criminal action brought in the name of the People, the individual libeled, so far as personal redress and satisfaction are concerned, is not considered. By the demurrer, the defendant, Stokes, claims that it appears upon the face of the indictment, that the alleged libel is privileged, and therefore not criminal. This contention of the defendant is predicated upon section 253 of the Penal Code, which reads as follows : “ A communi- cation- made to a person entitled to, or interested in, the communication by one who was also interested in or entitled to make it, or who stood in such a relation to the former as to afford reasonable ground for supposing his motives innocent, is presumed not to be malicious, and is' called a privileged communication/’ Undoubtedly a written defamatory statement published against a person in good faith and without malice under the circumstances stated in section 253 of the Penal Code, does not constitute a criminal libel, and if the grand jury should find an indictment upon such a statement, charging its publication to be a criminal libel, the defendant would be entitled to an acquittal by the trial jury, but the court cannot as matter of law and without evidence find that such statement is true and was published in good faith and without malice. To be sure said section provides that a written statement published under the circumstances therein defined is presumed to be published without malice, yet this is not a conclusive presumption any more than are the legal presumptions that a person is innocent or sane and accountable for his acts. It merely stands as a fact proven in the absence of any evidence to the contrary. Therefore, whether the statement referred to in the indictment is privileged or not under said section 253, can only be determined upon a trial upon the merits where evidence pro and con can be adduced.' • The law does not permit one in bad faith, even under the circumstances mentioned in said section, to publish an untrue statement to another’s injury, and the people have an undoubted right to show, if they can, by evidence, that the statement is untrue, that it was published in bad faith and with malice, which cannot be done on the trial of a demurrer but only upon the trial on the merits-before a jury. The contention of the defendants that the alleged defamatory letter is vague and uncertain, and that the indictment is defective for the reason that it does not set forth any explanatory matter showing its application to the complainant, is fully answered by section 289 of the Code of Criminal Procedure, which provides, that “ an indictment for libel need not set forth any extrinsic facts for the purpose of showing the application to the party libelled of the defamatory matter on which the indictment is founded ; but it is sufficient to state generally that the same was published concerning him, and the fact that it was so published must be established on the trial.” This indictment avers that the alleged defamatory letter was published concerning the complainant, and if it does not clearly.so appear by the letter itself, under this section of the Code it becomes matter of evidence and not of pleading to make it so appear. The further contention of the defendants, is that the indictment is fatally defective for the reason that the averment of publication, only shows that it was made by sending it to- the complainant himself, and that under the circumstances of this case this is no publication at all; but it will appear on inspection of the indictment that there is an allegation that the letter in question was sent to a third party, to wit: George W. Cornish, and if the jury should find that the said letter was not a privileged ■communication, then the sending of it to Cornish would ■be a complete publication. The defendants further claim and insist that the alleged defamatory letter contains no matter which is libelous per se as against the complainant; as to whether this contention is true or not, I think there is at least ■enough doubt about it to make it a question of fact for the jury instead of a question of law for the court. Undoubtedly, most of the questions raised upon thfe demurrer and the motion to dismiss, may be again raised on the trial upon the merits, where they can be more properly disposed of than upon a demurrer or a motion to dismiss. The motion to dismiss is denied and judgment ordered for the People on the demurrer, with leave to the ■defendants to answer, over.