Pearce v. Wilson

Mr. Justice Sterrett delivered the opinion of the court January 4th, 1886. In January, 1878, the plaintiffs in error, Alfred Pearce and Sarah J., his wife, for the nominal consideration of one dollar, conveyed the premises in dispute to Henry Goehring upon the following trusts, to wit: “That he shall hold the same for the use of the Harmony Savings Bank, and upon the further trust that if Alfred Pearce aforesaid, or any one on his behalf, shall, within four years from the date thereof, pay to the Harmony Savings Bank, its legal successor or representatives, or to said Goehring as trustee thereof, the sum of $8,000 without interest, then the said Goehring, his heirs, executors, administrators, or successors in the trust, shall convey the said premises in fee simple, clear of all incumbrances, to said Sarah J. Pearce, or to,such other person or persons as Alfred Pearce may direct; and upon the further trust that during the said period of four years the said parties of the first p|rt shall have the use and occupation of the said premises, they to pay the taxes that may be levied and assessed thereon during said period, and keep the said premises in good repair,” with covenant of general warranty, “ except and subject to the trust aforesaid.” In May, 1879, Goehring, as trustee of the bank, and shortly afterwards the bank itself, conveyed the premises to Mary A. and Jane Wilson, who, after expiration of the four years; brought this action of ejectment to recover possession of the premises. The parties differ widely as to the nature of the first-mentioned instrument, plaintiffs in error contending it is a mortgage to secure the payment of $8,000 in four years, and defendants claiming it is an absolute conveyance with the right to demand a re-conveyance, provided the sum named be paid within the time specified. Strictly speaking, it is a deed of trust, such as is employed in some of the states for the same purposes that mortgages are generally used here. Under our decisions, it is clearly a defeasible conveyance, or mortgage, reserving to the mortgagors the right to retain possession of the mortgaged property until default is made in payment of the sum for which it is pledged as security. Nothing is better settled than that a conveyance of laud, with an agreement, condition, or stipulation incorporated therein, that the same22 shall become null and void, or cease and determine, or become of no effect, or that the estate so conveyed shall be re-conveyed when the money is paid, or other equivalent expression, is a mortgage and not an absolute conveyance. Until quite recently, a deed absolute on its face, accompanied with an oral agreement to re-convey upon payment of a specified sum, was invariably held to be a mortgage, but it is now necessary that the defeasance be in writing. The form of the defeasance is immaterial if the intention clearly appears from the language employed. Any stipulation or agreement that plainly indicates an intention to return or re-convey the property, upon payment of the sum named, constitutes a mortgage. Our books abound in authorities to that effect. In this case, it clearly appears on the face of the deed itself that it was intended as security for payment of $8,000. If there was any doubt as to that, the testimony is quite sufficient to dissipate it. The resolution of the bank, given in evidence, contemplates nothing more than a conveyance of the property in pledge, and expressl]7 recognizes it as redeemable, in four years from that date, upon the payment of $8,000. The most that plaintiffs below can claim is that the instrument is a valid mortgage, and they, as assignees thereof, after default in payment within the time stipulated, have a right to the possession of the mortgaged premises, to be held by them until from the net rents, issues, and profits, or otherwise, the sum secured shall be fully paid. Their position, as assignees of the mortgage, is no better than that of their assignors, Goehring and the bank. They purchased with at least constructive notice of the terms on which the property was held. Plaintiffs in error were then in possession. That, as well as the defeasible deed, was notice to everybody that they were mortgagors in possession. But, it is further contended that the instrument in question, whether it be considered an absolute, conveyance or merely a mortgage, is void, because the controlling consideration for which it was given was the illegal settlement of the indictments then pending against Alfred Pearce and others in the Quarter Sessions of Butler County. That the admitted abandonment of those prosecutions was the moving consideration for the conveyance, is clearly if not conclusively shown b}7 the testimony. It appears that Pearce and others were charged with embezzlement, conspiracy, &c., and at June Sessions, 1877, bills of indictment were duly found, one of which contains four counts, respectively charging them, as officers of the Harmony Savings Bank, with embezzlement, fraudulently making false entries in the bank books, fraudulently making false bank statements, and fraudulently mutilating and [23] destroying accounts of the bank, with intent in each case to defraud the bank and its depositors. Negotiations looking to a settlement of these cases, as well as a civil case pending in Allegheny County, had been in progress for some time, but a final settlement was not fully agreed upon until immediately before the jury was empanelled to pass upon the indictments. In substance, the terms of settlement, so far as Pearce was concerned, were that he and his wife should execute and deliver to Goehring, the prosecutor, the conveyance above mentioned, and pay costs; in consideration of which Pearce should be released from all further liability to the bank, the prosecuting officer should decline to call any witnesses, and thus permit a verdict of acquittal to be rendered in the criminal eases. The necessary papers, already prepared, were to be delivered as soon as the verdict rvas thus taken. A jury was called, the acting district attorney stated he had no evidence to offer, and accordingly a verdict of not guilty was rendered in each case. Thereupon the remaining details of the compromise were carried out by the respective parties thereto. It is due to the acting district attorney to say, that in his testimony he also stated he informed the court that the parties had settled the cases, and no objection was interposed. Defendants in error claim that the abandonment of the criminal prosecutions was not the only consideration for the mortgage; that the settlement of the civil action and release of the bank’s claim against Pearce were important factors therein. Doubtless they were, but the mortgage was the price of the formal acquittals, as well as the release ; neither the conveyance nor the consideration therefor is divisible. If any part of either is illegal the whole is void: Filson v. Himes, 5 Barr, 454; Chitty Cont. 992. It is not only an indictable offence to compound a felony, but as a general rule all contracts to abate or compromise criminal offences, of any class, are held void as against the policy of the law, because of their manifest tendency to subvert public justice. Formerly a distinction existed in this respect between felonies and misdemeanors, but it is no longer recognized, except in a few minor offences, the prosecution of which is matter of little or no public interest. In many jurisdictions the distinction between felonies, and misdemeanors is abolished, and in those where it still exists it is regarded as artificial. There are many misdemeanors, the compounding of which militates far more against the public welfare than does the compounding of some felonies. It is more important,'for instance, that conspiracies to murder and to rob, and all treasonable conspiracies, should be prosecuted by the state unswayed 'by private interest, and that private hands should be kept off such pro [24] seditions, than that there should be this rigor manifested in all proseditions for larceny. If an agreement to stifle a prosecution for larceny is invalid, there is no offence, touching the public as such, whose prosecution can be made a matter of private arrangement: Whart. Cont. §§ 483-84, and notes; 1 Story Eq. § 294; Bredin’s Appeal, 11 Norris, 241; Riddle v. Hall, 3 Out. 116; Ormerod v. Dearman, 4 Id. 661. In Whitmore v. Farley (45 L. T., N. S. 99, cited in note to Whart. Cont., supra), it is said, “There are, no doubt, certain cases, as that of an assault, where the parties may compromise the offence without being guilty of an illegal act. But this does not apply to misdemeanors of a serious kind. Embezzlement is only a misdemeanor, but yet it is a criminal offence to compound a prosecution for embezzlement.” In general, it is to the interest of the public that the suppression of a prosecution, whether for felony or misdemeanor, should not be made matter of private bargain; and hence the suppression or settlement of such prosecutions is contrary to public policy, and therefore void, except in certain cases for the settlement of which provision is made. This brings us to the main contention of defendants in error, viz., that the settlement of the prosecutions in question was authorized by the .ninth section of our Criminal Procedure Act, which provides that: “In all cases where a person shall, on complaint of another, be bound by recognizance to appear ... or shall be committed, or shall be indicted for assault and battery or other misdemeanor, to the injury and damage of the party complaining, and not charged to have been done with intent to commit a felony, or not being an infamous crime, a'nd for which there shall also be a remedy by action, if the party complaining shall appear before the magistrate ... or before the court in which the indictment may be, and acknowledge to have received satisfaction for such injury or damage, it shall be lawful for the magistrate, in his discretion, to discharge the recognizance ... or in case of committal to discharge the prisoner, or for the court also where such proceeding has been returned to the court, in their discretion to order a nolle prosequi to be entered on the indictment, as the case may require, upon payment of costs; provided that this Act shall not extend to any assault and battery” or other misdemeanor committed by or on any officer or minister .of justice.” This Act, it will be observed, does not apply to all misdemeanors. It is expressly restricted to such as are (1) to the injury and damage of the party complaining; (2) such as are not charged to have been done with intent .to commit a felony; (3) such as are not infamous crimes; and (4) those for which there shall also be a remedy by action. These conditions must all concur. If [25] either be wanting, the Act does not apply. .In the case before us, the party complaining was Henry Goehring. It nowhere appears that either of the misdemeanors compounded was done to his personal injury an'd damage. On the contrary, the embezzlement, fraudulently making false entries in the bank books, fraudulently mutilating and destroying accounts of the bank, &c., are charged to have been done with intent to defraud the bank and its depositors. The same is doubless true as to the indictment for conspiracy. We have not been furnished with a copy thereof, but defendants in error allege it was for conspiracy to defraud the bank and its depositors. It appears, therefore, that at least one of the conditions necessary to bring the misdemeanors within the provisions of the Act is wanting. It is very evident, from the phraseology of the Act, that it was not intended to apply to misdemeanors of so grave a character as either of those in question, but only to such as are to the personal injury and damage of the prosecutor, and do not specially affect the public. The offences charged in the indictments are of a very high grade, much more detrimental to the common weal than many of the lower grades of felony. As officers of an incorporated bank, chartered in part, at least, for the public benefit, the parties accused occupied a quasi public position. The embezzlement of money entrusted to their care, by those occupying such positions, is a crime of. much more public importance than ordinary larceny. While the fraudulent alteration of the books, mutilation and destruction of the accounts of such an institution, with intent to defraud it and those who have entrusted their money and securities to its care and keeping, is not technically forgery, it is quite as bad, and generally worse, in its far reaching consequences and injurious effects on the public interests. Ever and anon whole communities are startled and public confidence-shaken to its very foundation by the commission of such crimes. To stifle their prosecution for a paltry pecuniary consideration is contrary to public policy, and a mere mockery of Justice in her own temple. Judgment reversed, and a venire facias de novo awarded.