Commonwealth v. Clay ( 1914 )

Opinion by

Portee, J.,

The indictment charged Henry Clay, John R. Wiggins, Willard H. Walls and Carl Zilenziger with conspiracy to cheat and defraud the city of Philadelphia, and with having, in pursuance of such conspiracy, been guilty of overt acts, in the letting and carrying out of contracts for the erection and alteration of certain buildings, by which the said city was defrauded of a large amount of money. Henry Clay was, at the time of the letting of said contracts, of the performance of the work thereunder and of the payment for the same, the director of public safety of the city of Philadelphia; Carl Zilenziger was the city architect, whose duty it was to prepare plans, drawings and specifications for and to supervise the erection and construction of buildings for the city; John It. Wiggins was the president and Willard H. Walls the treasurer of a corporation called John R. Wiggins & Company, engaged in the business of general contractors and builders, and to which the contracts for the construction and alteration of the buildings in question had been awarded. The trial in the court below resulted in the acquittal of Zilenziger and the conviction of Henry Clay, John R. Wiggins and Willard H. Walls. The defendants so convicted have severally appealed.

Having carefully examined the voluminous evidence we are convinced that the facts which it discloses are fairly stated by Judge Staples, in his opinion discharging the rulé for a new trial, which will appear in the report of this case, and it is unnecessary that we re-state the facts at length. The most flagrant instance of imposition upon the city disclosed by the evidence arose out of the manner in which the contracts for the erection of the police station, fire station and garage at Third and Race streets were manipulated. The original plans and specifications for that work had been prepared by Mr. Powell, the former city architect, whose health had failed and he had nothing to do with the awarding of these contracts. Those plans and specifications contemplated the erection of the fire station fronting on Race street. The city officers advertised for bids for the erection of the buildings according to those plans and specifications, and in response received three bids, that of Wiggins and Company being the lowest, and Mr. Clay, as director of the department of public safety, on March 16, 1910, awarded the contract to that company. Mr. Clay wrote a letter to the city solicitor, dated March 16, 1910, but not received by the latter officer until March 22, stating that he had so awarded the contract and requesting the latter officer to draw a contract in triplicate, the letter being accompanied by three-' copies of the specifications to be attached to the copies of the contract. The specifications thus sent to the city solicitor were not the same upon which the bids had been received, and they contained such modifications as to reduce the value of the work which Wiggins & Company would be required to do to the amount of from $20,000 to $25,000. The contract with the specifications so changed was prepared by the city solicitor, in accordance with the request of Mr. Clay, and was subsequently signed by Mr. Wiggins. This substitution of the cheaper specifications was attempted to be explained at the trial by the défendants upon the theory that it was a mistake, and that those specifications had really been prepared in anticipation of the letting of a second contract providing for the erection of the buildings under the new specifications. Even if this explanation was well founded, it disclosed that, at the time Mr. Clay instructed the city solicitor to prepare the first contract, and before the city had become bound by that written contract, these parties knew that the buildings were not to be erected in accordance with the expensive specifications which ought to have been attached to the first contract.

Within a very few days after this contract had been signed by the mayor of the city and Wiggins & Company, Mr. Clay announced his intention of changing the plans for thé erection of the buildings, so as to shift the garage to the Race street front and locate the fire station at the other end of the lot, fronting on Florist street. The location of the police station, which was the principal building, remained unchanged. On April 16, 1910, Mr. Clay, as director of public safety, caused to be published advertisements for sealed proposals “for certain additions to work already under way in the matter of the construction of police and fire stations and garage, No. 319t25 Race street, .... plans and specifications for all the above to be had at the office of the city architect.” The plans and specifications referred to provided for the erection of the garage on the Race street front of the lot and the fire station at the other end of the lot, fronting on Florist street. These plans and specifications, however, went far beyond any mere provision for the change in the location of the fire station and garage; they cheapened in many ways the specifications for the construction not only of the fire station and the garage but of the police station, the location of which was not changed.

The first contract provided for the erection of the buildings under expensive specifications and it was awarded to Wiggins & Company upon their bid at the sum of $107,800. The second contract, which ostensibly provided for additions to the work already commenced cheapened the specifications for the entire group of buildings, and this contract was awarded to Wiggins & Company, that corporation being the only bidder, at the sum of $13,890. The first contract, if the proper specifications had been attached, provided for everything in connection with the construction of the three buildings. The second contract also provided for everything in connection with the construction of the three buildings, but substituted other and cheaper materials for those which under the first contract Wiggins & Company would have been required to furnish, and omitted entirely some of the work required by the first contract. Owing to the manner in which the second contract was let, being for additions and alterations to a building for the erection of which Wiggins & Company then had a contract, that corporation had a manifest advantage over any other contractor who might have contemplated bidding upon the second contract, and the result was that there was no other bid. Before these buildings were completed, on November 12, 1910, a third contract was awarded by Mr. Clay to Wiggins & Company for certain work to be done in the construction of these buildings, which was not provided for by the cheaper specifications of the second contract. Most of this work had, however, been provided for by the original specifications which ought to have been attached to the first contract. Yet by this third contract the city was required to pay to John R. Wiggins & Company an additional sum of $4,675. The corporation of Wiggins & Company was actually paid the entire consideration called for by each one of these three contracts.

The contracts for the alteration of and additions to truck house No. 5, at Sixteenth and Catherine streets were manipulated in the same manner. After the first contract had been awarded to 'Wiggins & Company it was determined to move back the front wall of the building a distance of five feet, and within a few days after the first contract had been awarded, Mr. Clay advertised for proposals for certain additional alterations at Sixteenth and Catherine streets “to work already underway.” The specifications for this second contract provided not merely for the moving back of the front wall, but in themselves provided for all the alterations which were to be made in the building, and cheapened the work required to be done, some work provided for under the first contract being entirely omitted. The situation thus created made it impossible for any contractor other than Wiggins & Company to bid upon the second contract and it was awarded to that corporation upon its bid. In this instance also a third contract was awarded to Wiggins & Company, on November 1, 1910, for work the greater part of which had been provided for by the specifications of the first contract, but had been omitted from the cheaper specifications of the second contract: The corporation of Wiggins & Company was paid for work supposed to have been done on this building the entire consideration mentioned in each one of the three contracts. The evidence warranted a finding that the contracts for the erection of two bath houses were awarded to Wiggins & Company upon specifications which were not the same as those furnished to other prospective bidders. The facts as to all of these contracts are fully and fairly stated in the opinion of Judge Staples.

The testimony clearly established that the amounts paid to Wiggins & Company, and received by Mr. Wiggins and Mr. Walls as officers of that corporation, upon each of these several contracts were grossly excessive. The evidence warranted a finding that when the first contracts for the buildings at Third and Race streets and at Sixteenth and Catherine streets were awarded, that it was not the intention of these defendants that those buildings should be erected and constructed according to the plans and specifications upon which the bidding had taken place, that it was then the intention of the parties that supplemental contracts should be let and new specifications provided, which would be very advantageous to Wiggins & Company who secured the first contract and greatly cheapen the cost of construction; that it was the intention of the parties that Wiggins & Company, through this manipulation of the contracts, should collect from the city of Philadelphia a grossly excessive price, and that the city was defrauded in pursuance of a corrupt combination to which all the defendants were parties. It is, of course, possible that the city officers may have been merely negligent and incompetent, but in view of the number of the blunders involved the court could not declare as matter of law that those officers had been merely negligent or incompetent. The learned judge was, therefore, clearly right in refusing the prayer of each of the defendants that the jury be instructed that they, Respectively, must be acquitted. The question of the guilt or innocence of the defendants was for the jury.

The burden was upon the commonwealth in this case to satisfy the jury beyond a reasonable doubt that there had been a conspiracy, a confederation for the purpose of defrauding the city, between two or more of the defendants or some one of them and a person or persons not named. It was not necessary to prove by direct evidence when and where the corrupt agreement had been made, nor the terms thereof, nor by whom it was originated. The case may be made out by proof of such circumstances and such acts of the several parties as to logically lead the jury to the conclusion that the conduct of the defendants could be rationally explained only on the theory of the existence, however formed, in the minds of the parties of a common, unlawful design, entertained and understood by all of them, in pursuance of a corrupt confederation to defraud; in short, a conspiracy as charged in the indictment: Com. v. Sanderson, 40 Pa. Superior Ct. 416, 473; Com. v. Snyder, 40 Pa. Superior Ct. 485, 523. When the evidence is of this character the inference of conspiracy is permissible, but that inference is to be drawn by the jury, when satisfied of its correctness beyond a reasonable doubt: Com. v. Beard, 48 Pa. Superior Ct. 319, 340. There is no such thing as an inadvertent and negligent conspiracy; there must be intended unity of purpose: Com. v. Tilly, 33 Pa. Superior Ct. 35. The charge of the court to the jury in the present case was in most particulars correct and many of the assignments of error are without merit. When, however, the learned judge proceeded to instruct the jury as to the legal principles applicable, under the evidence, to the case of each of the individual defendants, respectively, he failed to discriminate between the functions of the court and those of the jury, and thus fell into error.

The learned judge charged the jury, in that part of the charge embraced by the twenty-first specification of error, referring to the defendant, Henry Clay, as follows: “The Commonwealth contends that because he was'so intimately connected with these transactions, and because Eisenhawer called his attention that the architect was not sending to him the plans, as he ought to have sent them, and that he was at the hearing held before the City Controller, therefore, he ought to have been put upon notice, and if he were put upon notice, he woüld have made the inquiry, and if he made the inquiry he would have found that the city was cheated and defrauded, and if he permitted any payments to be made after that time, then he would be guilty of being one of the parties to this conspiracy to cheat and defraud. If there is enough evidence in the case to convince you beyond a reasonable doubt that Henry Clay did have notice, that he. did make inquiry, and upon that inquiry he found that moneys were still to be paid, and he knew then, after making inquiry, that the city of Philadelphia was being cheated and defrauded, and he permitted the money to be paid, we say to you that he would be guilty as one of the parties to this conspiracy, if you find a conspiracy, because as we have said you must find more than one person engaged in the conspiracy, but in order to convict Henry Clay of this offense you must find, beyond a reasonable doubt, that he had a guilty knowledge of this transaction.” Under this instruction the jury must have understood that it was their duty to find a verdict of guilty as to Clay if they were satisfied of the following facts, without more; viz., that Clay had discovered, before the last money was paid upon any one of the contracts, that he had been deceived by his subordinate, the city architect; that the city was being cheated and defrauded, and that after the discovery he, Clay, took no steps to prevent the payment of the last money upon the contract. Now, if the jury had returned a special verdict finding all these specific facts, that verdict would not have been responsive to the issue in this case. The gravamen of the offense charged was the conspiracy, the corrupt combination of two or more persons to do an unlawful act. The facts so stated were sufficient to warrant an inference by the jury that Clay was a party to the conspiracy, but the court was not warranted in declaring, as matter of law, that those facts standing alone constituted Clay guilty of the crime charged in the indictment. Let it be conceded that the facts were as stated and, further, that Clay had discovered that the city was being defrauded through a conspiracy between Walls and Wiggins or between Walls and Zilenziger, it was still for the jury to determine whether the failure of Clay to prevent the payment of the last money on the contract established beyond a reasonable doubt that he was a party to the conspiracy, or was the result of negligence, incompetency, or reluctance to admit that he had been inefficient in the discharge of his duty. The twenty-first specification of error is sustained.

The court fell into the same error in those parts of the charge which dealt with the cases of Walls and Wiggins, respectively. The learned judge said referring to the defendant Walls, in that part of the charge which is the subject of the twenty-eighth specification of error: “Did he know? You remember his testimony, gentlemen of the jury. He said seeing the second contract and thinking no one else would bid upon it, they gave a flyer, they.did not make an estimate of what it was actually or reasonably worth to do this work; they gave a flyer; they took it on the jump. Did he know? Do you believe he knew? If he took any money from the city of Philadelphia, knowing that his firm had taken an unfair advantage, we say to you, gentlemen of the jury, that he was guilty of conspiracy to cheat and defraud, if you find that any other person had entered into this arrangement with him.” This instruction left entirely out of view, so far as Walls was concerned, any question of the good faith of the city officers in the awarding of the first and second contracts. The jury must have understood this instruction as meaning that if Walls knew that the manner in which the city officers invited bids and awarded the first and second contracts rendered it improbable that any person other than Wiggins & Company would submit any bid upon the second contract and thus gave to that corporation an advantage over other bidders, even though the action of the city officers had -been taken in good faith, but mistakenly, and not in pursuance of any conspiracy; if Walls and Wiggins, with this knowledge, took advantage of the situation created by the incompetency of the city officers and submitted a bid which was excessive and received any money from the city of Philadelphia upon the resulting contract, then they were guilty of conspiracy to cheat and defraud, as charged in the indictment. We are not here dealing with the question of the-enforceability of these contracts, nor are we tq inquire whether the contracts might have by proper' proceedings been set aside because of the negligence of the city officers. The question is whether, upon the facts stated, it was for the court to declare, as matter of law, that the defendants were guilty of a criminal conspiracy. If the officers of a qity, or individuals acting for themselves enter into a contract with two or more contractors for the erection of a building according to certain plans and specifications, and before the building is completed, or even commenced, determiné upon changes in or additions to the building, and invite bids for the making of such changes or additions, it is altogether probable that the contractors who have secured the first contract will have a decided advantage over any other bidder upon the second contract. Now, in such a case, can it be held to be a criminal conspiracy if the contractors— who have secured the first contract — agree, among themselves, that they will take advantage of the situation and demand and receive an excessive price for the work required by the second contract, in the absence of any evidence that they had been guilty of any misrepresentation or deception? The contract referred to in the language above quoted was that for the alteration of truck house No. 5, at Sixteenth and Catherine streets, and substantially the same instructions were given in that part of the charge embraced by the twenty-ninth and thirtieth specifications of error, with regard to the contract for the construction of the police station, fire house and garage at Third and Race streets. The facts stated by the court in these parts of the charge, if found by the jury, were evidence from which, taken in connection with the other testimony in the case, it was proper for the jury to infer that all the defendants were guilty of a criminal conspiracy, but that inference was one which the jury alone was authorized to draw. The charge of the court bearing upon the case of the defendant John R. Wiggins, upon which the thirty-first specification is based, is properly subject to the same criticism. The jury might properly, under this instruction, have believed it to be their duty to convict Wiggins in case they found that he and Walls knew that the corporation which they represented was receiving excessive profits under these contracts, or that the changed plans and specifications prevented fair and open bidding, and that with this knowledge they had bid an excessive price upon the two contracts. The twenty-eighth, twenty-ninth, thirtieth and thirty-first specifications of error are sustained.

The court permitted the commonwealth to prove that during a period of about four years prior to the finding of the indictment the defendant Clay, as director of the department of public safety, had awarded to the corporation of John R. Wiggins & Company forty-two contracts for the construction of buildings, while only fifteen of such contracts had during the same period been awarded to other parties. The fifty-fourth specification of error is founded upon an exception taken to the' admission of this evidence. The witness who testified to these facts had been called by the. commonwealth and cross-examined by the defendants, and upon such cross-examination had said that.he, being an employee of the department of public safety, had never noticed anything wrong in the dealings between Mr. Clay and John JL Wiggins & Company. The commonwealth on the redirect examination of the witness introduced the evidence to which exception was taken. The court in admitting the evidence said: “The fact standing by itself would not indicate that there was any dishonesty or corruption, but it might be one fact to be connected by their instruction, which might make it material in this case; and the witness having been interrogated and cross-examined by counsel for defendants as to whether or not he did not know of anything that would indicate fraud.” It was no doubt argued in the court below as it has been here that the fact that forty-two out of fifty-seven construction contracts, during a period of four years, were awarded to John R. Wiggins & Company, indicated that the corporation of John R. Wiggins & Company was a favored contractor. It. was not shown, nor was there any offer by the commonwealth to show that there had been any fraud, irregularity, or circumstance tending to excite suspicion in connection with the letting and execution of any one of these forty-two contracts. The language of the court in admitting the testimony must have been understood by the jury to mean that, while the number of contracts standing alone would not of itself indicate fraud, the fact that such a number of contracts had been awarded was proper to be considered in passing upon the question whether there had been a fraudulent connection between these parties. If the commonwealth had offered to show that in these forty-two contracts, or in some of them, the same course had been pursued which operated to the detriment of the city in the manipulation of the contracts recited in the indictment, the testimony would have been admissible, as tending to establish a system and to show that the acts charged in the indictment were part of a consistent series of frauds, intentionally committed, and not attributable to mere negligence or mistake: Com. v. Sanderson, 40 Pa. Superior Ct. 416. “Where in conspiracy an overt act is done within two years, and said act is but one of a series of acts committed by the parties, evidently in pursuance of a common design and to carry out a common purpose, such acts would be evidence, provided they tend to show that the last act was part of a series and the result of an unlawful combination; and such evidence may satisfy a jury of the existence of a conspiracy at the latter period:” Com. v. Bartilson, 85 Pa. 482. The evidence as to the forty-two contracts, some of which had been awarded four years prior to the finding of the indictment, did not tend to show that there had been any fraud in the award or execution.of those contracts; it did not “tend to show that the last acts (those charged in the indictment) were a part of a series and the result of an unlawful combination.” There was nothing in the evidence from which a jury should have been permitted to infer that those contracts were not let to the lowest bidder in each case, or that the work was not honestly performed. This specification of error is sustained.

The sixty-third specification of error is not sustained by an exception taken in the court below and must be dismissed. The remaining specifications of error refer to the action of the court in the proceedings upon the motion of the defendants for a new trial. One of the reasons assigned for a new trial was the reading, during the trial, by the jurors of newspapers which contained accounts of and comments upon the proceedings prejudicial to the defense. In support of this reason the defendant Henry Clay filed an affidavit and petition to which were attached copies of the newspaper articles complained of and which the affidavit alleged had been read by the jurors. Some of these articles contained attacks upon certain individual members of the jury and alleged that those particular jurors were friends of the defendant Clay, and if the defendants, when they acquired knowledge of the publication of the articles had moved the court for the withdrawal of a juror and the continuance of the cause, if it appeared that the articles had been read by the jury, there might have been good ground for granting the motion. The affidavit of Mr. Clay states that the defendants had knowledge of the publications complained of and called them to the attention of the court during the progress of the trial, and clearly indicates that the defendants not only knew of the publication of the articles but that they were being read by the jury; it states “that the jury read these newspapers — in fact on some of the days bringing the newspapers into the jury box with them.” The defendants, with this knowledge, elected to let the trial proceed and made no motion to discharge the jury. “If the defendant supposed that he could not have a fair trial, he ought to have laid the matter immediately before the court, and requested that the jury might be discharged. He ought not to have taken the chances of a verdict in his favor and kept his motion for a new trial in reserve:” McCorkle v. Binns, 5 Binney, 340; Eakman v. Sheaffer, 48 Pa. 176; Com. v. Razmus, 210 Pa. 609; Nemcof v. United States, 202 Fed. Repr. 911; Com. v. Beard, 48 Pa. Superior Ct. 319. The defendants having, with knowledge, elected to take their chances with the jury, we would not now be warranted in holding the court below guilty of an abuse of discretion in refusing, upon that ground, to grant a new trial, and the sixty-eighth specification of error is overruled.

The defendants urged as another reason for a new trial that certain of the jurors had been guilty of misconduct during the course of the trial. The affidavit of Mr. Clay stated that the commonwealth had employed detectives to shadow the individual jurors and that the reports of such detectives, in possession of the district attorney, showed that one juror not only talked to the detectives during the course of the trial, but on the fifth day of the trial, two weeks before the closing of the testimony, he had declared to one of the detectives that he and the other members of the jury had decided that the defendants were guilty. The defendants presented petitions praying that the jurors be examined and required to testify as to their proceedings. The court declined to so order, which action is the foundation of the sixty-fifth and sixty-sixth specifications of error. It is well settled that jurors, after they have rendered a verdict, ought not to be admitted to give testimony to invalidate that verdict: Cluggage v. Swan, 4 Binney, 150; Holt v. United States, 218 U. S. 245; and these specifications of error must be overruled.

The defendants having entered a rule to take depositions in support of their motion and reasons for a new trial, the district attorney moved to vacate that rule. The court upon hearing this motion made the following order: “Under the rule heretofore taken by the defendants, they are hereby permitted to take the depositions of witnesses in support of a motion for a new trial, but no juror may be examined as one of such witnesses. To this extent the rule heretofore entered by the defendants is modified.” The defendants, under the rule as modified, called as witnesses, before a notary public agreed upon between counsel for the commonwealth and the defendants, Robert D. Cameron, captain of detectives, and James Tate, Junior, lieutenant of detectives. These witnesses, respectively, after having stated their official position, were among other questions asked: “What were the names of the detectives or special officers that were assigned by your department, to watch the jurors?” Each of the witnesses, after having been told by the district attorney that he could not be required to answer any question, declined to answer this question, or to give any information whatever as to the names of the detectives who had shadowed the members of the jury during the trial. The defendant Walls thereupon presented to the court his petition, praying the court to order and direct said witnesses to answer the questions which they had declined to answer. The court granted a rule on Cameron and Tate to show cause why they should not be directed to answer the questions in the record of the testimony, attached to the petition of Walls. Upon the hearing of this rule, the court directed the district attorney to allow counsel for the defendants to examine and make copies of all reports which had been submitted to him by the detectives, and this was done. When these reports were produced they disclosed that one of the detectives had made a report on the fifth day of the trial, more than two weeks before the testimony was closed, which stated that juror No. 7, who then believed that he had been discharged from further service as a juror, had said to the detective, “It was a good thing for Clay he was out of the jury because he said that he, as well as the rest of the jurors had their own opinion of the case, and he said that Clay was a sure convicted man as far as he was concerned.” Reports made by two detectives, at different dates stated that juror No. 12 was talking about the Clay case every night, at a cigar store on Race street. The report of another detective might fairly give rise to an inference that he had at least attempted to talk to one of the jurors about the case. It must be borne in mind that these reports were not competent, primary evidence as to what the jurors had done or said; they were simply what the detectives had reported to the district attorney that the jurors had said. These reports did not disclose the names of the detectives who made them; the identity of the detective making the report being concealed by designating him in the report, as “P-1,” “D-l,” “S-l,” “S-2,” “C-21,” “40,” “45,” “Operative Seg.,” “Operative No. 8,” and so throughout the list. If these reports of the officers acting for the commonwealth were true one of the jurors was talking about this case every night during the trial at a cigar store and another of them had declared that he possessed a fixed opinion as to the guilt of the defendant Clay before the case had been half tried. The court had this information before it. There was nothing which invested the detectives employed in shadowing this jury with any peculiar privilege, nor is there any principle of public policy which would excuse them from testifying. We are of opinion that, in these circumstances, the defendants were entitled to know who these detectives were, in order that they might personally call them to testify as to what the jurors had said and done. The sixty-fourth specification of error is sustained. The effect, if this were the only specification of error sustained, would not be to strike down the verdict, but would only result in remitting the record to the court below, for the purpose of permitting the testimony to be taken, and properly disposing of the motion for a new trial; but as we have sustained other specifications of error which render a retrial of the case necessary, the disposition of this particular specification is without practical results. We find nothing requiring further discussion in the specifications of error not hereinbefore specifically dealt with.

The judgments against the several defendants Henry Clay, John R. Wiggins and Willard H. Walls are reversed, and a new venire is ordered.