Court Opinion

ID: 3679706
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:25:21.490879+00
Date Added: 2024-06-11T14:09:07.528694
License: Public Domain

Section 5174, Supplement to the 1913 Compiled Laws of North Dakota, provides:
"Every officer, agent or clerk of any association organized under this chapter, who wilfully and knowingly subscribes or makes any false statements or entries in the books of such association, or knowingly subscribes or exhibits any false paper with intent to deceive any person authorized to examine as to the condition of such association, or wilfully subscribes or makes any false report, shall be guilty of *Page 878 
forgery as defined in the penal code of the state of North Dakota and punished accordingly."
The defendant was indicted in the district court of Towner county for a violation of this section by exhibiting a false paper to a person authorized to examine as to the condition of a banking association. The indictment charged that the offense was committed as follows, to wit:
"That at the said time and place, the said F.C. Rother, then and there being an officer, to wit; the president of the Towner County Bank, a banking association then and there duly organized and existing under and by virtue of the laws of the state of North Dakota and engaged in the banking business at Perth, Towner county, North Dakota, and as such president having the general management of the business and control of the property, books, records, and assets of said bank, did then and there wilfully and knowingly, unlawfully and feloniously and with intent to deceive, exhibit to J.L. McRae, a person authorized to examine and then and there examining said Towner County Bank as to its condition, a false paper, to wit, a writing purporting to be a promissory note made, executed and delivered by one Margaret Hood, dated January 14, 1922, wherein and whereby said Margaret Hood promised and agreed to pay to the order of said Towner County Bank the sum of $1,700 on the 1st day of November, 1922, with interest thereon, a more accurate description of which said purported note cannot be given, whereas in truth and in fact the said pretended note was then and there false, fraudulent, fictitious and forged and constituted no obligation of the said Margaret Hood and was of no value, and the said F.C. Rother did then and there and at the time of exhibiting such false paper, know said pretended note to be false, fraudulent, fictitious, and forged."
Defendant entered a plea of not guilty. He, also, moved for a change of venue on the first three grounds specified in § 10, 756, Comp. Laws 1913. The place of trial was changed to Rolette county upon order of the court entered pursuant to stipulation of the parties. Later he asked leave to withdraw the plea for the purpose of interposing a motion to quash the indictment. The application to withdraw the plea for the purpose of moving to quash the indictment was supported by the affidavit of the defendant to the effect that until the return of said *Page 879 
indictment into court no criminal proceedings of any kind or character were pending or had been instituted in any court in the state of North Dakota against affiant; that he was not in custody nor under recognizance when the grand jury was impanelled and that he had had no opportunity to submit any challenge to the grand jury or any member thereof; that one John McIlrath was a member of the grand jury which returned the indictment; that he was not a disinterested and impartial member of said grand jury; that said McIlrath was instrumental in having the grand jury called and personally circulated a petition for the calling thereof; that no grand jury would have been called but for the interest and activity of said McIlrath; that said McIlrath was and is an enemy of the defendant and was interested in the procuring of the indictment against the defendant; that the position of McIlrath in the grand jury room was that of a private prosecutor, and that if he had not been a member of the grand jury no indictment would have been found or returned against the defendant; that the deliberations of the grand jury were dominated by the said McIlrath to the end that an indictment might be returned against the defendant.
The trial court entered an order in writing granting defendant's motion for leave to withdraw the plea of not guilty for the purpose of making a motion to set aside the indictment. Thereafter, defendant filed a motion in writing that the indictment be set aside for the following reasons:
                               1.
"That one John McIlrath was a member of the grand jury that returned the indictment against defendant in this case; that the said John McIlrath was one of the grand jurors that voted to indict defendant; that the said John McIlrath was then and there of such a frame of mind that he could not and did not act impartially and without prejudice to the substantial rights of the defendant in said matter; that he the said John McIlrath was the person who first moved to have a grand jury called at the last term of district court in Towner county; that he the said John McIlrath personally circulated the petitions for the calling of said grand jury and that his object at all times in securing the presence of a grand jury at said term of court was to have defendant indicted regardless of the evidence; that he the said John McIlrath *Page 880 
was then and there violently and without cause prejudiced against the defendant; that he dominated said grand jury and forced an indictment against defendant, voting in favor thereof.
                               2.
"That prior to the return of said indictments against defendant (five in number) no criminal proceedings of any kind or character were pending or had been instituted in any court in the state of North Dakota, against this defendant; that he was not in custody or under recognizance when the grand jury was impaneled and defendant had no opportunity to challenge said grand juror John McIlrath, or any of the grand jurors, before the swearing in of the said grand jury and before the finding of the bill (indictment) against him by said grand jury; that if he had had opportunity to challenge the said John McIlrath he could then and there have shown to the satisfaction of the presiding judge of said court said John McIlrath was not a fair and impartial grand juror and that he the said John McIlrath could not without prejudice to the substantial rights of the defendant be present at or take part in the consideration of charges against this defendant by said grand jury and act as a member of said grand jury.
                               3.
"That the said John McIlrath was incompetent in law to act as a grand juror in the consideration of charges then and there before said grand jury against this defendant and incompetent to participate in and vote for a bill (indictment) against this defendant.
                               4.
"That the presence in the grand jury room of the said John McIlrath and as a member of said grand jury he being then and there disqualified to act as a member of said grand jury considering charges against this defendant vitiated the findings of said grand jury in considering charges against this defendant and vitiated the indictment returned against defendant in this case by said grand jury, the presence in the grand jury room of the said John McIlrath and his participation in the deliberations of said grand jury and his voting as a member thereof in connection with the return of indictments against defendant worked a manifest and substantial injury to defendant. *Page 881
                               5.
"That the position of the said John McIlrath in said grand jury room was then and there in fact the position of a private prosecutor actuated by private enmity against this defendant and then and there seeking the gratification of his own personal malice against this defendant, to the manifest and substantial injury of defendant."
The trial court entered a written order reciting that said motion to quash came duly on for hearing and that the attorneys for the defendant offered to prove:
"That at the regular March A.D. 1926 term of the district court of Towner county, North Dakota, a grand jury was called and impanelled by order of the presiding judge of such court; that until the return of the indictment involved in this case in said Towner county district court no criminal proceedings of any kind or character were pending or had been instituted in any court in the state of North Dakota against the defendant and that he was not in custody or under recognizance to answer any charge in said Towner county district court or in any other district court of the state of North Dakota either at the time of impanelling said grand jury or the return of said indictment; that said John McIlrath was a member of said grand jury which found the indictment herein against the defendant and participated in the deliberations of said grand jury, which resulted in the finding of such indictment; and a state of mind existed at the time of such deliberations and the finding of such indictment on the part of the said grand juror John McIlrath in reference to this case and in reference to the defendant herein which prevented him from acting impartially and without prejudice to the substantial rights of the defendant, and disqualified him to act as such grand juror, an unqualified bias on the part of the said John McIlrath as such grand juror as against the defendant herein."
The order further recites that "it appearing that such offer should be denied and the court being duly advised in the premises. It is ordered that the aforesaid offer of the defendant be and the same is hereby in all things denied and the motion of the defendants to quash the indictment herein be and the same is hereby in all things overruled."
After the motion to quash had been denied the defendant interposed *Page 882 
a plea of not guilty. The case was tried to a jury upon the issues thus formed.
The evidence shows that during all the time involved in this action the defendant was the president of the Towner County Bank at Perth and one Alcock was the cashier of such bank. One Margaret Hood was an employee in the bank in 1910; she later married and became Mrs. McCuley. After she left the employment of the Towner County Bank, and about January 1920, she sent $2,500 to the defendant Rother for investment. The defendant invested this money by purchasing four promissory notes from the Towner County Bank, being one note in the sum of $1,000 and three notes each in the sum of $500. The defendant Rother, personally guaranteed payment of such notes. It appears that the notes were not paid and in 1922 Mrs. McCuley informed the defendant or the bank that she desired some of her money. She returned the notes and the bank sent her a check or draft for $1,700. As a counterchange to the money so sent, defendant prepared a promissory note in the sum of $1,700 and signed the name of Margaret Hood thereto with his initial "R" underneath the signature and marked the note "memo" "memorandum" or "collateral" and placed it in the pouch containing the past due paper of the bank. This note remained part of the assets of the bank until sometime after May 6, 1925; but it was removed between that day and October 28, 1925, the date the bank closed. The evidence shows that interim May 6, 1925 and October 28, 1925, this and a number of other notes were removed from the assets of the bank pursuant to the orders of the state examiner. The bank was examined by the deputy examiner, McRae, on and about May 6, 1925. McRae testified that at that time the $1,700 Hood note was among the bills receivable of the bank in the past due paper pouch. He also testified that the defendant Rother was not present at the time this examination took place, and that his dealings at that time were had with Alcock, the cashier. McRae further testified as regards the note: "It was told to me by Mr. Alcock that Mr. Rother made the deal, that he did not know anything about it, that is all the information I have got in regard to the note." Alcock testified that the note in question was carried as an asset of the bank from on or about January 14, 1922; that it was a memorandum note and "represented the bank's equity" in the four promissory notes aggregating $2,500 belonging *Page 883 
to Mrs. McCuley; that at one time a deputy examiner who examined the bank suggested that these notes be pinned to the memorandum note.
It is the contention of the prosecution that the Hood note was a forgery; that it was placed in the assets of the bank by Rother with intent to deceive the examiner; that it was exhibited by him to the state examiner and his deputies as, and represented to be, an actual promissory note of Margaret Hood, and was so accepted and considered by the examiner. It is the contention of the defendant, on the other hand, that the note was not a forgery; that it showed on its face that it was not executed by Margaret Hood, and that it was merely a memorandum note; that the nature of the transaction was explained to the deputy examiner; that there was no intention to deceive the examiner and that the transaction was one in which the defendant acted with an honest purpose and without any intent to deceive.
In its instructions to the jury the court said:
"Now the law under which this action is brought reads as follows: Every officer of a banking corporation who knowingly exhibits any false paper with intent to deceive any person authorized to examine the same as to the condition of such bank shall be guilty of the crime of exhibiting a false statement. The defendant is charged with knowingly exhibiting a false paper with intent to deceive the bank examiner or deputy when examining the bank as to its condition, and that at the said time of exhibiting said paper he was an officer of the banking association organized under the laws of North Dakota. I charge you that you cannot find the defendant guilty of exhibiting a false paper unless you find that the witness Alcock is guilty of exhibiting a false paper with intent to deceive the bank examiner or deputy when examining the bank as to its condition, and that the defendant Rother aided and abetted Alcock in the commission of such crime or not being present advised and encouraged its commission. Before you can find the defendant guilty, you must find in addition to the other allegations that at the time that Alcock exhibited a false statement to the examiner if you find he did that, he intended to deceive the examiner as to the bank's condition.
"You are instructed that the intent with which an act is done is a mental process and as such generally remains hidden within the mind *Page 884 
where it is conceived, and is rarely, if ever, susceptible of proof by direct evidence, but may be inferred from the outward manifestations, by the words or acts of the party entertaining it, and the facts and circumstances surrounding or attending upon the acts sought to be proved, with which it is charged to be connected.
"In other words, before you can find the defendant guilty you must find that Alcock is guilty, and that Mr. Rother aided and abetted or encouraged Alcock in committing the crime. In other words, it would be just the same as though Mr. Alcock was the defendant here or that they were both defendants. You have to find Alcock guilty before you can find Rother guilty. If youshould find Alcock guilty then you would have to find that Rotheraided and abetted Alcock in committing the crime."
The jury returned a verdict of guilty and the defendant was sentenced to imprisonment in the state's penitentiary for an indeterminate period of not less than one year and not more than four years. Defendant moved for a new trial. The motion was denied; and defendant has appealed from the judgment and from the order denying a new trial.