Source: https://supreme.justia.com/cases/federal/us/317/412/
Timestamp: 2019-04-25 13:55:13+00:00

Document:
"No person shall be prosecuted, tried, or punished for any offense, not capital, . . . unless the indictment is found, or the information is instituted, within three years next after such offense shall have been committed,"
applies to a prosecution for criminal contempt. P. 317 U. S. 416.
2. The act of inducing a federal court, through misrepresentations by attorneys, to issue decrees effectuating a corrupt settlement of litigation, including a distribution of impounded funds, if assumed to be "misbehavior" in the "presence" of the court within the meaning of Jud.Code § 268, is a criminal contempt, and an "offense" against the United States within the meaning of R.S. § 1044. P. 317 U. S. 416.
and the three years are counted from that time. The bar of the statute cannot be deferred upon the ground that the offense was a continuing one, and was not complete until the litigation ended or until further acts dehors were committed in the execution of the scheme. P. 317 U. S. 419.
Certiorari, post, p. 608, to review judgments affirming sentences for contempt. For opinions of the trial court, see 35 F.Supp. 593, 39 F.Supp. 189.
in the federal court to restrain the enforcement of certain statutes of Missouri on the ground of unconstitutionality. A three-judge court was convened which granted motions for interlocutory injunctions on July 2, 1930, whereby the Superintendent and the Attorney General were enjoined, pending final decision, from enforcing the Missouri statutes -- on condition, however, that the insurance companies deposit the amount of increase in rates which was collected with a custodian of the court to await the final outcome of the litigation. In September, 1930, a special master was appointed who held hearings. During this time, the premiums impounded by the court accumulated until, by 1936, they amounted to almost $10,000,000.
companies, and 30% to Street and another as trustees for the insurance companies. The latter were to account to the companies, but not to the court or the Superintendent. The memorandum agreement was not disclosed to the court. But, on June 18, 1935, the insurance companies filed in each case a motion reciting terms of settlement and praying for an order of distribution. On the next day, the insurance companies and O'Malley filed stipulations agreeing that the court should make the order of distribution. Thereafter, on June 22, 1935, October 26, 1935, and January 24, 1936, hearings were held in open court on the motions, and briefs were filed. Counsel, who were wholly innocent and acting in good faith, assured the court of the honesty, fairness, and desirability of the settlement. On February 1, 1936, the court, acting in reliance on the representations and without a hearing on the merits, entered a decree ordering distribution of the impounded funds as prayed in the motions. It also dismissed the bills, reserving jurisdiction, however, for certain purposes.
and O'Malley to be indicted for evasion of income taxes on the amounts of money so received. They pleaded guilty, and were fined and imprisoned late in May, 1939. Id. On May 29, 1939, O'Malley's successor filed a motion praying that the decrees of February 1, 1936, be set aside on the basis of those disclosures, and that the insurance companies be ordered to restore the funds distributed to them. The court ordered the insurance companies to make restitution, and they did. At the same time, the court asked the district attorney whether contempt proceedings should be filed. About a year passed, when the court on May 20, 1940, requested the district attorney to institute contempt proceedings against petitioners. An information was filed July 13, 1940. Motions to abate and quash were overruled. 35 F.Supp. 593. Thereafter answers were filed, and a hearing had. Petitioners were adjudged guilty of contempt -- Pendergast and O'Malley being sentenced to two years' imprisonment, and McCormack being sentenced to probation for two years. 39 F.Supp. 189. The Circuit Court of Appeals affirmed. 128 F.2d 676. We granted the petition for certiorari because of the importance in the administration of justice of the problems raised. 317 U.S. 608.
therefore punishable as a contempt, we are of the opinion that this prosecution was barred by § 1044 of the Revised Statutes.
"No person shall be prosecuted, tried, or punished for any offense not capital . . . unless the indictment is found, or the information is instituted, within three years next after such offense shall have been committed. . . ."
"infractions of the law, visited with punishment as such. If such acts are not criminal, we are in error as to the most fundamental characteristic of crimes as that word has been understood in English speech."
supra, 233 U.S. at 233 U. S. 611-612) brings the case squarely within the language of the section.
Certainly the power to punish contempts in the "presence" of the court, like the power to punish contempts for willful violations of the court's decrees, "must have some limit in time." Gompers v. United States, supra, p. 233 U. S. 612. It is urged, however, that there is no limitation on prosecutions for contempts in the "presence" of the court except as one may be implied from the conclusion of the proceeding in which the contempt arises. But, if we are free to consider the matter as open, no reason for that different treatment of contempts in the "presence" of the court is apparent. Adams v. Woods, 2 Cranch 336, held that this statute of limitations was applicable to an action of debt for a penalty. Chief Justice Marshall stated that it would be "utterly repugnant to the genius of our laws" to allow such an action to lie "at any distance of time." Id. p. 6 U. S. 342. That observation is equally apt here. Proceedings like the rate litigation out of which this prosecution arose might well continue for years on end awaiting final disposition of all the funds. If there is a contempt, it takes place when the "misbehavior" occurs in the "presence" of the court. Statutes of limitations normally begin to run when the crime is complete. See United States v. Irvine, 98 U. S. 450. Every statute of limitations, of course, may permit a rogue to escape. Yet, as Chief Justice Marshall observed in Adams v. Woods, supra, p. 6 U. S. 342, "not even treason can be prosecuted after a lapse of three years." That was still true at the time of this offense. See R.S. § 1043, 18 U.S.C. § 581. There is no reason why this lesser crime, punishable without some of the protective features of criminal trials, should receive favored treatment.
only to proceedings for contempt "not committed in the presence of the court." 233 U.S. at 233 U. S. 606. But that reservation, made out of an abundance of caution, also extended to "proceedings of this sort only" (id., p. 233 U. S. 606) -- viz., proceedings where no information was filed. Ex parte Terry, 128 U. S. 289, 128 U. S. 314, sanctioned summary punishment for "direct contempts" committed in the "presence" of the court. The question whether that procedure could be followed "at a subsequent term, or at a subsequent day of the same term" was specifically reserved. Id., p. 128 U. S. 314. That is a procedural problem peculiar to direct contempts in the face of the court (see Cooke v. United States, 267 U. S. 517) and obviously has no relevancy to the problem of the statute of limitations.
The prosecution contends, however, that the offense consisted in the imposition of a fraudulent scheme upon the court, that successful execution of the scheme required not only misrepresentations to the court but continuous cooperation in concealing the scheme until its completion, that the fraud on the court would not be fully effected until 80% of the impounded funds was distributed to the insurance companies and $750,000 paid by Street and divided among petitioners. On that theory, the fraudulent scheme, though commenced before the three-year period, continued thereafter. Accordingly, it is argued, by analogy to such cases as United States v. Kissel, 218 U. S. 601, 218 U. S. 607-608; Hyde v. United States, 225 U. S. 347, 225 U. S. 367-370; Brown v. Elliott, 225 U. S. 392, 225 U. S. 400-401, that the statute of limitations began to run only after the latest act in the execution of the scheme. It is true that the information was drawn on the theory of such a continuing offense. But the difficulty with that theory lies in the nature of the offense described by § 268 of the Judicial Code.
or "so near thereto as to obstruct the administration of justice." And, if the latter requirements are not met, the fact that the fraud may be "misbehavior" is not sufficient. The mere continuance of a fraudulent intent after an act of "misbehavior" in the "presence" of the court does not make that "misbehavior" a continuing offense under § 268. The misrepresentations to the court made possible, of course, the consummation of this nefarious scheme. But each subsequent step in that scheme did not constitute a contempt unless, like the misrepresentation itself, it was "misbehavior" in the "presence" of the court or "so near thereto as to obstruct the administration of justice." No such showing has been made here, and none has been attempted. The fact that the scheme was fraudulent and corruptly obstructed the administration of justice does not enlarge the limited power to punish for contempt. It merely means that, if petitioners can be punished, it must be through the ordinary channels of criminal prosecutions under the Criminal Code. We are forced to conclude that any contempt committed occurred not later than February 1, 1936, when the court ordered the distribution of the impounded funds. It was therefore barred by the statute of limitations.
* Together with No. 186, O'Malley v. United States, and No. 187, McCormack v. United States, also on writs of certiorari, post, p. 608, to the Circuit Court of Appeals for the Eighth Circuit.
at a Judge or disturbing the peace of a courtroom. I would hold the conduct of these petitioners to be "misbehavior" and within the "presence" of the Court, and hence a contempt within the meaning of the statute. I should not deflect what seems to be the course of practical and obvious justice in this case by resort to metaphysical speculations as to the effect of absence of the schemers from the courtroom when attorneys whom also they had deceived obtained the order from the Court.
Neither can I agree with the Court's conclusion that this contempt expired with the setting sun, and the statute of limitation then began its work of immunizing these defendants. The fraud had as its object not merely to get the Court order, but to get the money from the Court's custody. The contempt and the fraud did not cease to operate so long as the money was being disbursed in reliance upon it, and by virtue of its concealment.

References: § 268
 § 1044
 § 1044
 v. 
 v. 
 v. 
 v. 
 § 1043
 § 581
 v. 
 v. 
 v. 
 v. 
 § 268
 § 268
 v. 
 v.