Burnett v. State

The statement of facts has been made somewhat full in order that, by exhibiting the various proceedings in detail, the errors assigned and relied upon for a reversal of the judgment may be at once clearly understood and deprived of any seeming force.

We are confronted at the threshold of the cause with the contention of the Attorney General "that this is a civil proceeding, and that this court has no jurisdiction to review the judgment of the lower court," citing the case of Flathers v.State, 7 Okla. Cr. 668, 125 P. 902, and cases therein cited. While the Attorney General may have proceeded upon the theory that the proceeding was remedial and the contempt civil, it is evident from the record that the district court very properly considered the defendants' contumacy a "direct" or "public," and therefore, a criminal contempt; and, though the proceedings were had to compel a compliance by the defendants with an order of the court, the punishment was primarily in the interest of public justice to vindicate the authority and the dignity of the court from the disrespect shown to it and to its order by the defendants.

We think this case is clearly distinguished from the Flathers case, wherein this court held that a refusal and neglect to pay alimony constituted a civil contempt. In the opinion in that case the following language is used:

"Contempts of court are of two kinds, civil and criminal. Much confusion exists in judicial decisions as to whether or not contempt proceedings are civil or criminal. As a general rule, these designations must be considered with reference to the specific question before the court. * * * In the absence of a statutory classification, it is impracticable to state a general rule by which, in all cases, to distinguish these two classes, in the one or the other of which every act of contempt must be classified."

When the State Bank Commissioner, in the name of the state of Oklahoma, through its Attorney General, asked that the books and records of the Farmers' Merchants' Bank of Sapulpa be produced, it was for the purpose of protecting the interest of the state and the rights of the public, not the interest of an individual litigant. One of the provisions of the Bank Guaranty Law (section 324, Comp. Laws 1909) is that:

"The Bank Commissioner shall take possession of the books, records and assets of every description of such bank or trust company, collect debts due, and claims belonging to it, and upon order of the district court, or judge thereof, may sell or compound all bad or doubtful debts, and on like order may sell all the real or personal property of such bank or trust company upon such terms as the court or judge thereof may direct, and may, if necessary, pay the debts of such bank or trust company, and enforce the liabilities of the stockholders, officers and directors; provided, however, that bad or doubtful debts as used in this section shall not include the liability of stockholders, officers and directors."

The power to punish contempts is inherent in all courts of justice, and is expressly conferred upon them by the Constitution. Article 2, sec. 25, Bill of Rights. Its existence is essential to the preservation of order in judicial proceedings, and to the enforcement of the judgments, orders and decrees of the court, and consequently to the due administration of justice; and upon its proper and prudent exercise depend the respect and dignity and efficiency of our courts of justice. It has been well said that:

"The exercise of this power has a twofold aspect, namely: First, the proper punishment of the guilty party for his disrespect to the court or its orders; and, second, to compel his performance of some act or duty required of him by the court, which he refuses to perform." (Texas v. White, 22 Wall. 137, 22 L.Ed. 819.)

A party to a suit, who willfully destroys, removes, conceals, or disposes of its subject-matter pending the proceedings, with intent to withdraw it from the jurisdiction of the court, and to render futile any order or decree concerning it, unavoidably defies the power and offends the dignity of the court, and thereby renders himself liable to punishment for contempt. Cyc. par. E, and cases cited, p. 8, note 22.

As to the distinction between civil and criminal contempts, Mr. Rapalje, in his work on Contempts, at section 21, gives the best general definitions relating thereto we have found. He says:

"`Civil contempts' are those quasi contempts which consist in failing to do something which the contemner is ordered by the court to do for the benefit or advantage of another party to the proceeding before the court; while `criminal contempts' are all those acts in disrespect of the court or its process, or which obstruct the administration of justice, or tend to bring the court into disrepute."

In the case of Gompers v. Bucks Stove Range Co.,221 U.S. 418, 31 Sup. Ct. 492, 55 L.Ed. 797, 34 L.R.A. (N.S.) 874, it is said:

"The distinction between civil and criminal contempts seems to be that, where the order of the court is made in a civil proceeding solely for the benefit of one of the parties litigant, and is disobeyed by the other party to the suit, an order committing such party for contempt until he yields obedience to the order is a civil proceeding. Such are orders requiring the payment of money or the performing of some act for the benefit of the opposing litigant, and are not matters in which the public is interested. Criminal contempts consist in such disobedience of the mandates or decrees of a court as constitute a defiance of the power and authority of the court."

In Bessette v. Conkey Co., 194 U.S. 329, 24 Sup. Ct. 667, 48 L.Ed. 997, Mr. Justice Brewer said:

"It may not be always easy to classify a particular act as belonging to either one of these two classes. It may partake of the characteristics of both. A significant and generally determinative feature is that the act is by one party to a suit in disobedience of a special order made in behalf of the other. Yet sometimes the disobedience may be of such a character and in such a manner as to indicate a contempt of the court, rather than a disregard of the rights of the adverse party."

See, also, Clay v. Waters, 178 F. 385, 101 C.C.A. 645, 21 Ann. Cas. 897, and cases collated in the note; also Smythe v.Smythe, 28 Okla. 266, 114 P. 257.

The contumacious conduct and acts of these defendants, as officers of said bank, in refusing to produce the books, records, and papers of said bank were well calculated to embarrass and obstruct the court in the due administration of justice, and constitute a contempt of flagrant character in the face of the court. We think this was the view of the trial court, because the court, before pronouncing judgment, said to the defendants: "Your answer has been held to be insufficient by the court. Have either of you anything further to say why you should not be punished for contempt of court in failing to obey its orders?"

It is our opinion that the proceedings and judgment committing the defendants to confinement in the county jail were criminal, and therefore reviewable on appeal by this court. The motion to dismiss the appeal is therefore denied.

The first contention of the learned counsel for the defendants is that no sufficient predicate was laid in the petition for the order to produce the books; and it is argued that the order was void, because it commanded the officers of said bank to produce the books, without naming any particular person, and that, inasmuch as the main body of the suit fell when the application for a receiver was denied, all other orders fell with it. There is no merit in this contention. It is enough that the district court had jurisdiction of the parties and subject-matter of the action, and was exercising its jurisdiction to hear and determine the issues in the case. If the court having jurisdiction should issue an improper order, it is obligatory until reversed by an appellate court; and parties may be punished for disobedience or resistance of such orders. Rapalje on Contempt, sec. 16. Thus, where the alleged contempt consists in the failure to comply with the terms of a court order or decree, inquiry into the merits of the order or decree will not be allowed. 9 Cyc. p. 47, and cases cited in note 58.

It is next contended that the defendants' answer was sufficient to purge them of contempt, as it shows inability to comply with the order of the court; and for this reason they were entitled to their discharge, and the infliction of punishment by the court was the exercise of arbitrary and unconstitutional power. The doctrine of the common law that in constructive criminal contempts, alleged to have been committed out of the presence of the court, if the defendant's sworn answer squarely met and denied the alleged contempt, such answer was conclusive, and no further evidence could be received, has no application in this case. Here the defendants' answer states as a mere conclusion their inability to comply with the order of the court. The testimony of the other officers of the bank shows that these defendants were in possession of the bank's books and records, and no explanation is made or offered by them as to how or in what manner these books and records passed from their control. However, as hereinbefore stated, this was a direct contempt in the face of the court, and the hearing was given to conform with the constitutional guaranty of section 25 of the Bill of Rights, which provides: "In no case shall a penalty or punishment be imposed for contempt until an opportunity to be heard is given." Inability to comply with an order of the court may, under certain circumstances, avail as a defense for failure to obey the same; but it stands as an inflexible rule of common sense and common justice that, where the contemnor creates the inability to comply, in anticipation of an order of court, commanding him to produce and deliver, he rather aggravates than extenuates his offense. The defendants cannot avoid obedience to the order of the court by simply adding perjury to fraudulent concealment or misappropriation of the books, records, and papers of the bank of which they were officers. We think the true rule in proceedings for contempt for disobedience of an order of court is that the sworn answer of the party charged with contempt is evidence to purge him thereof; but it is not conclusive evidence. It may be contradicted and supported by other evidence; and the question whether or not the party charged has purged himself of the contempt is for the determination of the court, upon the consideration of all the evidence adduced for and against him; and if, upon the hearing so had, the court is satisfied that it is within the power of the party charged with contempt to comply with the order of the court, the court should enforce the order by a fine or confinement as for contempt. Wartman v. Wartman, Taney, 362, Fed. Cas. No. 17,210; Clay v. Waters, supra; Ex parteKellogg, 64 Cal. 343, 30 P. 1030.

The only legal justification sought to be established by the defendants is the claim of privilege against self-crimination, in the second paragraph of their answer, as follows:

"That even if it were in the power of these defendants to produce said books, they might contain information which would tend to incriminate these defendants, and to render them liable to criminal prosecution."

There is no merit in this contention. It ignores the fact that the order calls for the books, records, and papers of said Farmers' Merchants' Bank, and commanding that the defendants, as officers of said state bank, produce the same. They are not asked to produce their private books and papers.

One of the best-considered cases on the question here presented is Wilson v. U.S., 221 U.S. 361, 31 Sup. Ct. 538, 55 L.Ed. 771, Ann. Cas. 1912d 558. The opinion by Mr. Justice Hughes is clear and logical, and shows great research, and it is here quoted:

"We come, then, to the broader contention of the appellant, thus stated in the argument of his counsel: `An officer of a corporation, who actually holds the physical possession, custody, and control of books or papers of the corporation, which he is required by a subpoena duces tecum to produce, is entitled to the same protection against exposing the contents thereof which would tend to incriminate him as if the books and papers were absolutely his own.' That is, the power of the courts to require their production depends, not upon their character as corporate books, and the duty of the corporation to submit them to examination, but upon the particular custody in which they may be found. If they are in the actual custody of an officer whose criminal conduct they would disclose, then, as this argument would have it, his possession must be deemed inviolable; and, maintaining the absolute control which alone will insure protection from their being used against him in a criminal proceeding, he may defy the authority of the corporation whose officer or fiduciary he is and assert against the visitatorial power of the state, and the authority of the government in enforcing its laws, an impassable barrier.

"But the physical custody of incriminating documents does not, of itself, protect the custodian against their compulsory production. The question still remains with respect to the nature of the documents and the capacity in which they are held. It may yet appear that they are of a character which subjects them to the scrutiny demanded, and that the custodian has voluntarily assumed a duty which overrides his claim of privilege. This was clearly implied in the Boyd case, where the fact that the papers involved were the private papers of the claimant was constantly emphasized. Thus, in the case of public records and official documents, made or kept in the administration of public office, the fact of actual possession or of lawful custody would not justify the officer in resisting inspection, even though the record was made by himself, and would supply the evidence of his criminal dereliction. If he has embezzled the public moneys and falsified the public accounts, he cannot seal his official records and withhold them from the prosecuting authorities on a plea of constitutional privilege against self-crimination. The principle applies, not only to public documents in public offices, but also to records required by law to be kept, in order that there may be suitable information of transactions which are the appropriate subjects of governmental regulation and the enforcement of restrictions validly established. There the privilege, which exists as to private papers, cannot be maintained.

"There are abundant illustrations in the decisions. Thus, inBradshaw v. Murphy, 7 C. P. 612, 32 E.C.L. 654, it was held that a vestry clerk, who was called as a witness, could not, on the ground that it might incriminate himself, object to the production of the vestry books kept under the statute. 58 George III, c. 69, par. 2. In State v. Farnum, 73 S.C. 165, 53 S.E. 83, it appeared that a legislative committee had been appointed to investigate the affairs of the state dispensary; and it was provided that it should have access to all books of the institution, or of any officer or employee thereof. In anticipation the state dispenser removed certain books from the files, defending his action on the plea that they contained private matter which the committee had no right to inspect. The court ruled that it was the `obvious duty of any officer to keep books, letters, and other documents relating to the business of his office, and to the manner in which he has discharged, or failed to discharge, its duties, in the place where the public business with which he is charged is conducted, subject to examination by any of the committees appointed by the General Assembly; and upon an application for mandamus to compel him to perform this obvious public duty, it is essential for the court to ascertain the facts and inform itself whether there has been an actual removal of public documents or other public property and a refusal to return them for examination.' In State v.Donovan, 10 N.D. 203, 86 N.W. 709, the defendant was a druggist, who was required by statute to keep a record of all sales of intoxicating liquors made by him, which should be subject to public inspection at reasonable times. It was held that the privilege against self-incrimination was not available to him with respect to the books kept under the law; for they were `public documents, which the defendant was required to keep, not for his private uses, but for the benefit of the public, and for public inspection.' On similar grounds, in State v. Davis,108 Mo. 666, 18 S.W. 894, 32 Am. St. Rep. 640. the court sustained a statute requiring druggists to preserve the prescriptions they compounded, and to produce them in court when required. See, also, State v. Davis, 68 W. Va. 142, 69 S.E. 639, 32 L.R.A. (N.S.) 501, Ann. Cas. 1912A, 996; People v. Coombs, 158 N.Y. 532,53 N.E. 527; Louisville, etc., R. Co. v. Commonwealth, (Ky.) 51 S.W. 167; State v. Smith, 74 Iowa 580, 38 N.W. 492;State v. Cummins, 76 Iowa 133, 40 N.W. 124; People v. Henwood,123 Mich. 317, 82 N.W. 70; Langdon v. People, 133 Ill. 382, 24 N.E. 874.

"The fundamental ground of decision in this class of cases is that, where, by virtue of their character and the rules of law applicable to them, the books and papers are held subject to examination by the demanding authority, the custodian has no privilege to refuse production, although their contents tend to criminate him. In assuming their custody, he has accepted the incident obligation to permit inspection.

"What, then, is the status of the books and papers of a corporation which has not been created as a mere instrumentality of government, but has been formed pursuant to voluntary agreement, and hence is called a private corporation? They are not public records in the sense that they relate to public transactions, or in the absence of particular requirements, are open to general inspection, or must be kept or filed in a special manner. They have reference to business transacted for the benefit of the group of individuals whose association has the advantage of corporate organization. But the corporate form of business activity, with its chartered privileges, raises a distinction when the authority of government demands the examination of books. The demands, expressed in lawful process, confining its requirements within the limits which reason imposes in the circumstances of the case, the corporation has no privilege to refuse. It cannot resist production upon the ground of self-incrimination. Although the object of the inquiry may be to detect the abuses it has committed, to discover its violations of law, and to inflict punishment by forfeiture of franchises or otherwise, it must submit its books and papers to duly constituted authority, when demand is suitably made. This is involved in the reservation of the visitorial power of the state and in the authority of the national government, where corporate activities are in the domain subject to the powers of Congress.

"This view, and the reasons which support it, have so recently been stated by this court in the case of Hale v. Henkel,supra [201 U.S. 43, 26 Sup. Ct. 370, 50 L.Ed. 652], that it is unnecessary to do more than to refer to what was there said (201 U.S. at pages 74, 75, 26 Sup. Ct. at page 379 [50 L.Ed. 652]): `Conceding that the witness was an officer of the corporation under investigation, and that he was entitled to assert the rights of the corporation with respect to the production of its books and papers, we are of the opinion that there is a clear distinction in this particular between an individual and a corporation, and that the latter has no right to refuse to submit its books and papers for an examination at the suit of the state. The individual may stand upon his constitutional rights as a citizen. He is entitled to carry on his private business in his own way. His power to contract is unlimited. He owes no duty to the state or to his neighbors to divulge his business, or to open his doors to an investigation, so far as it may tend to criminate him. He owes no such duty to the state, since he receives nothing therefrom, beyond the protection of his life and property. His rights are such as existed by the law of the land long antecedent to the organization of the state, and can only be taken from him by due process of law, and in accordance with the Constitution. Among his rights are a refusal to incriminate himself, and the immunity of himself and his property from arrest and seizure, except under a warrant of the law. He owes nothing to the public, so long as he does not trespass upon their rights. Upon the other hand, the corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the state and the limitations of its charter. Its powers are limited by law. It can make no contract not authorized by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation. There is a reserved right in the Legislature to investigate its contracts and find out whether it has exceeded its powers. It would be a strange anomaly to hold that a state, having chartered a corporation to make use of certain franchises, could not, in the exercise of its sovereignty, inquire how these franchises had been employed, and whether they had been abused, and demand the production of the corporate books and papers for that purpose. The defense amounts to this: That an officer of a corporation, which is charged with a criminal violation of the statute, may plead the criminality of such corporation as a refusal to produce its books. To state this proposition is to answer it. While an individual may lawfully refuse to answer incriminating questions, unless protected by an immunity statute, it does not follow that a corporation, vested with special privileges and franchises, may refuse to show its hand when charged with an abuse of such privilege. * * * Being subject to this dual sovereignty, the general government possesses the same right to see that its own laws are respected as the state would have with respect to the special franchises vested in it by the laws of the state. The powers of the general government in this particular, in the vindication of its own laws, are the same as if the corporation had been created by an act of Congress. It is not intended to intimate, however, that it has a general visitatorial power over state corporations.' See, also, Consolidating Rendering Co. v. Vermont, 207 U.S. 541, 28 Sup. Ct. 178, 52 L.Ed. 327, 12 Ann. Cas. 658; Hammond PackingCo. v. Arkansas, 212 U.S. 322, 348, 349, 29 Sup. Ct. 370, 53 L.Ed. 530, 15 Ann. Cas. 645.

"The appellant held the corporate books subject to the corporate duty. If the corporation were guilty of misconduct, he could not withhold its books to save it; and if he were implicated in the violations of law, he could not withhold the books to protect himself from the effects of their disclosures. The reserved power of visitation would seriously be embarrassed, if not wholly defeated in its effective exercise, if guilty officers could refuse inspection of the records and papers of the corporation. No personal privilege to which they are entitled requires such a conclusion. It would not be a recognition, but an unjustifiable extension, of the personal rights they enjoy. They may decline to utter upon the witness stand a single self-criminating word. They may demand that any accusation against them individually be established without the aid of their oral testimony or the compulsory production by them of their private papers. But the visitatorial power which exists with respect to the corporation, of necessity, reaches the corporate books without regard to the conduct of the custodian."

All of the records and papers of the Farmers' Merchants' Bank of Sapulpa are public records, and became, when it was taken over by the Bank Commissioner, the property of the state.

In the case of Noble State Bank v. Haskell, 22 Okla. 88,97 P. 607, it is said:

"Banks are chartered by the state, not with the paramount view of enabling the stockholders to make investments and derive profits therefrom, but to meet a public necessity. The stockholders, having made investments therein, should be protected; but private interest must always be subordinated by the state, in the reasonable exercise of its police power, to the public welfare or good. With the view that the depositor, as well as the stockholder, and the general public with an incidental interest therein, may be protected, banking is regulated, and limitations, restraints, and requirements are imposed. The imposition of double liability upon the stockholders, the requirement of reserve funds, stipulations as to what capital stock cannot be invested in, prescribed qualifications of the directors — all these having been tried, in the judgment of the Legislature the further restriction that active officers should not borrow from the bank without incurring pains and penalties was deemed salutary. In addition, to further and more completely protect the depositors, the depositors' guaranty fund is created; the Legislature acting pursuant to the mandatory declaration of the Constitution. Section 1, art. 14."

And in the case of State ex rel. v. Cockrell, 27 Okla. 630,112 P. 1000, it is said:

"That the depositors' guaranty fund, and the funds of a failed bank in the hands of a Bank Commissioner for the purpose of reimbursing the depositors' guaranty fund, is as much a fund of the state as the common school fund is also true. The depositors' guaranty fund act was sustained by this court on the theory of the reserved power of the state to alter and amend charters of state banking corporations for the public welfare. [Citing cases.] This power, exercised for the public welfare by the legislative act which causes to be levied the assessment `against the capital stock of each and every bank or trust company organized or existing under the laws of this state * * * equal to five per centum of its average daily deposits during its continuance in business as a banking corporation,' for the purpose of protecting the depositors of such banks (section 3, art. 2, c. 5, pp. 121-123, Sess. Laws 1909), is the same as that which levies, or causes to be levied, a tax upon the people and property within the state for the maintenance and support of the common schools and educational institutions. The title of such depositors' guaranty fund vests in the state just as much so as the common school lands, or the proceeds of the sale of the same, and the taxes levied and collected for the maintenance and support of said schools, all of which are held in trust by the state for a specific purpose. Even if it were not a state fund, it would at least be a fund under the management of the state."

The officers of an insolvent state bank cannot disobey, on the ground of the constitutional protection against self-crimination, the order to produce and deliver the books, records, and papers of such bank to the State Bank Commissioner. The privilege against self-crimination afforded by section 21 of the Bill of Rights, "that no person shall be compelled to give evidence which will tend to incriminate him, except as in this Constitution specifically provided," does not protect the officers of an insolvent state bank in resisting the compulsory production of its books, records, and papers because such documents may tend to incriminate them. And such officers may be compelled, in a judicial proceeding, to produce the books, records, and papers of such bank for inspection, even though to do so would tend to incriminate them.

In conclusion we will say that these delinquent defendants must realize that the law is not so lame, helpless, and impotent that craft, intrigue, and subterfuge, or bold defiance, can defeat the due administration of justice. It is truly said that "courts might as well break and cast away their scepter of justice if derelicts may thus trifle with their authority." The public have a profound interest in preserving the power and authority of their courts of justice. Everything that affects the well-being of organized society, the life and liberty of the citizen, and the rights of property is submitted to their decision. Without the power to punish for contempt, the courts would become objects of public derision, and the citizen would be without protection or security in his person and property.

The judgment is affirmed, and the order heretofore allowing bail as supersedeas is hereby revoked.

The clerk of the district court of Creek county is directed to issue to the sheriff of said county, commitments in accordance with the judgment of the court. Mandate to issue forthwith.

ARMSTRONG, P.J., and FURMAN, J., concur.