State v. Archer

4 Balt. C. Rep. 201
CourtBaltimore City Court
DecidedApril 2, 1923
StatusPublished

This text of 4 Balt. C. Rep. 201 (State v. Archer) is published on Counsel Stack Legal Research, covering Baltimore City Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Archer, 4 Balt. C. Rep. 201 (Md. Super. Ct. 1923).

Opinion

STEIN, J.

At the close of this case counsel for traversers asked leave to file a list of authorities supporting the principles which they thought would control the verdict in this case; a fter filing which also asked leave to file a. brief discussing the evidence, which leave was granted and the brief filed upon the 30th instant.

These briefs, the oral arguments of counsel for the traversers and for the State, wore unusually well done, and reflect great credit even upon the distinguished gentlemen who prepared them.

1 hoard and read the arguments with great interest; examined the briefs and authorities with care, and owing to the importance of the questions presented determined to reduce to writing the reasons upon which the verdict is based.

The indictment charges against three traversers a continuing conspiracy; one, Arthur Gordon, elected to be tried before a jury; the other two, O. Graham Archer and S. Burns Wilson, elected to be tried before the Court. The State elected to proceed with the trial before the Court, of Archer and Wilson.

The crime charged is a continuing-conspiracy of the three traversers, “to cheat and defraud the customers of Archer, Harvey & Co.” of their moneys and securities ; the indictment contains six counts; the first, third and fifth counts, charge the conspiracy as formed on August 11th, 1917; the other three counts each charge its formation on January 1st, 192Í; each of the six counts charges the conspiracy as continuing uninterruptedly until December 20th, 3921.

Of the three traversers, Archer was the senior member of the firm of Archer, Harvey & Co.; consisting- of O. Howard Harvey and himself, which was formed in March, 1899, with capital of $10,000', to carry on, in the City of Baltimore a stock brokerage business.

Gordon was an employee, who for some years prior to 1916 had been the bookkeeper of the firm; and thereafter, and continually until its failure on December 22nd, 1921, its office manager. Wilson was a friend of both members of the firm, knew Archer eighteen or twenty years, for a long-while intimately; knew Harvey about twelve years; was a member of the club to which both belonged; since 1912 or 1913 was a customer of the firm, an habitue of its offices; in July, 1917, had lost in his speculations through it about $76,000; nine-tenths of his personal fortune, and then owed the firm $103,682.

On December 22nd, 1921, the Circuit Court of Baltimore appointed Mr. George Cator, receiver of the firm of Archer, Harvey & Co.; thereafter this firm was adjudicated an involuntary bankrupt and Mr. Cator appointed trustee.

These traversers were presented and indicted charged with having formed a continuing conspiracy to cheat and defraud the customers of Archer, liar[202]*202vey & Co. of their moneys and securities, and after the overruling- of a number of motions, pleas and demurrers, the traversers, Archer and Wilson plead (1) not guilty; (2) limitations, to the last plea, the State filed a common traverse.

Testimony was then taken, during which Mr. George Cator, the trustee in bankruptcy produced the firm’s books, some of which were offered in evidence over the objections of the two traversers, Archer and Wilson, whose exceptions to the Court’s action are preserved.

At the close of the case the traversers filed exceptions to testimony admitted subject to 'exception, the Court’s action on which will appear herein.

Prom the evidence offered, I find among others the following facts:

(1) That the firm of Archer, Harvey & Co. was formed in March, 1899, to carry on the stock brokerage business in the City of Baltimore; its partners were C. Graham Archer and O. Howard Harvey, each of whom, first contributed one-half of the capital of $10,000, the sum of five thousand dollars ; which in the third year was increased by like contributions to $26,-600; that thereafter Mr. Harvey loaned the firm $35,000 on bonds and $10,000 in cash.

(2) That throughout the entire life of the firm each partner drew $400 as a monthly salary.

(3) That to the knowledge of Archer the firm was continually and hopelessly insolvent from before August 11, 1917, to December 20, 1921, inclusive.

(4) That prior to August, 1917, Archer knew that unauthorized sales of customers’ securities had been made and concealed from the customers, memoranda of which sales even kept on loose sheets, which became so numerous that shortly before August, 1917, Archer gave a firm employee permission to run them through a special account, which account was opened and called on the books of the firm “S. B. Wilson, Special.”

(5) That for the purpose referred to in the above finding of fact another account was opened in the name of C. Graham Archer.

(6) That to the knowledge of Archer the books of Archer, Harvey & Oo. showed that the traverser Wilson on July 1st, 1917, owed the firm $103,6S2, which he could not pay, that Wilson was then and has been ever since hopelessly insolvent.

(7) That thereafter while so insolvent and so owing the above large sums of money Archer allowed Wilson to speculate through the firm without putting up any money or paying any interest, and with large and increasing losses; that Archer also allowed Wilson to withdraw from the firm money between $2,000 and $3,000 per year, from August, 1917, so that on December 20th, 1921, through these cash withdrawals and his losses from speculation Wilson owed the firm of Archer, Harvey & Co. $244,404.14, and that during the last four years Archer withdrew from the firm over $90,000.

That S. Burns Wilson knew:

A. That on the first day of July, 1917, he was hopelessly insolvent and owed Archer, Harvey & Co. the sum of $103,682.

B. That the S. Burns Special Account was opened first to allow his name to be used to conceal a fraud, i. e., the unauthorized use of a customer’s stock in a short sale made by Archer without the customer’s knowledge.

C. That while so insolvent and owing Archer, Harvey & Co. the above-named large sum of money, that firm allowed him to speculate without putting up a margin as is customary, and that the general result of his speculation was to heavily increase losses and indebtedness to the firm.

D. That while making the above losses, and while he did not pay the firm any money, the firm paid him in cash between $2,000 and $3,000 per year, and had his life insured for the benefit of the firm, and the firm paid the premiums thereon.

E. That he knew and allowed the continued use of the S. Burns Wilson special account; that although he claims he thought it was for the benefit of a brother of Archer, he on February 10th, 1921, with that knowledge assigned his interest in that account to the firm; that he with that knowledge signed, swore to and filed two Federal income tax returns based on the profits of that account, of which returns the last was made after the above assignment, and in June, 1921, after the death of the brother to whom [203]*203lio was told the account belonged, and after the assignment of the account to the firm, went to Washington, I). G., and tried to get an extension of the payment of the second instalment of the income tax.

E.

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2 Md. 201 (Court of Appeals of Maryland, 1852)

Cite This Page — Counsel Stack

Bluebook (online)
4 Balt. C. Rep. 201, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-archer-mdcityctbalt-1923.