In Re Nelson , 103 Mont. 43 ( 1936 )

This is an action in contempt. The Progressive Publishing Company, a corporation, and John W. Nelson, who is the president, editor, and general manager of the newspaper published by the corporation called the "Western Progressive," are each charged with the contempt of this court by the publication of the article appearing in the "Western Progressive" published on March 13, 1936, entitled, "Four supreme justices uphold bank fraud."

The article deals with the decision of this court in the case of Doyle v. Union Bank Trust Company, 102 Mont. 563,59 P.2d 1171, in an action wherein the plaintiff sought to recover damages for false representations of the defendant in selling her an Insull debenture bond. The first part of the article briefly purports to state the substance of the case and the opinion of the four Justices of the court. It is followed by the dissenting opinion of Chief Justice W.B. Sands. The alleged contempt refers exclusively to the portion of the article preceding the quoted dissenting opinion of Judge Sands, and consists of the following: "Bankers who practice fraud upon their old clients and customers cannot be reached for damages when the fraud is discovered. So ruled four justices of Montana supreme court this past week in one of the most sensational decisions subverting the rights of innocent investors ever written into the records of a Montana court. The four judges in effect said that any customer or client of the bank who relies upon the banker's statement in purchasing securities cannot come back upon that banker for damages if subsequently it is discovered that the statements were false and the deal conceived and executed in fraud."

It will be observed that the statement does not purport to be a quotation from either the majority or minority opinion, but is the conclusion of the writer as to what was decided by the two opinions. In this connection let it be observed that the writer is merely a layman and not a lawyer or judge, and he assumed the very dangerous province of stating the results reached in the opinion of the court; results that the best lawyers often construe very differently. Frequently, newspapers quote certain portions of a supreme court decision technically correct; but it is quoted very unfairly, in this, that certain portions of the opinion are left out that are necessary to fairly present the case in question.

Newspapers hold a very important and fiduciary relation to the public, inasmuch as the public presumes and has a right to expect that the decision of the court has been fairly presented. Those who have followed the daily newspaper reports of Montana decisions well know how unfairly and unjustly many of the supreme court decisions have been presented to the public, particularly cases that involved big financial interests. The facts stated in the opinion are usually not incorrectly stated, but the facts required to fairly present the poor man's side are suppressed and the substance of the poor man's side of the controversy thereby misjudged by the public.

Information concerning court proceedings is presented to the reading public almost exclusively by the big daily newspapers. The "Western Progressive," a weekly paper, stepped aside from its usual procedure and attempted in this instance to publicize this opinion of Doyle v. Union Bank Trust. Co. The printing of both the majority and minority opinions would probably have been too long for their complete publication. Therefore, the editor contented himself with a brief statement of the majority opinion and copied the dissenting opinion of Judge Sands in full. A reading of the two opinions taken as one prompted the brief statement in the forepart of the article. The writer was undoubtedly prejudiced against the bank on account of the injury resulting to a poor woman by very plausible representatives of the bank, which representations were found by the jury to be fraudulent. The defense of the bank was that in the presentation of the case at the trial in the district court the plaintiff failed to prove damages, and this court in its majority opinion determined that such proof of damages was not technically sufficient. In fact, the decision was that there was no proof of damages, and therefore the opinion condemned the district court for not ordering the jury to bring in a verdict for the defendant. The writer of the objectionable article, Nelson, the defendant, evidently was impressed with the logic of the dissenting opinion which quoted the testimony at length respecting the damage feature of the case. Nelson was honest in his belief that damages were established as found by the jury.

The majority opinion in the present case deals eloquently with the freedom of the press as guaranteed by the Constitution. I heartily agree with this opinion in their comments along this line. However, the alleged contemptuous language of the article here complained of is exceedingly mild and fair when compared with the false and libelous statements of court cases published so frequently by the daily press.

Particular exception is taken by the majority of the court to the headline, "Four supreme court judges uphold bank's fraud." It is a well-known fact that a story cannot be told in its entirety in the headline, but when the opinion and dissenting opinion in this case are analyzed, it seems to me that the layman can come to no other conclusion than that four members of this honorable body were in fact upholding the fraud of the bank. In fact, that is what the majority opinion in the Doyle Case did, and that is exactly what I had in mind when I said in my dissenting opinion, "I cannot subscribe to such a monstrous doctrine." In other words, the court adopted the technical argument of the defendant bank which to all practical purposes defeated recovery; otherwise, nominal damages at least should have been given for the conceded misrepresentation and fraud of the bank. Again, the majority opinion finds fault with the statement in the objectionable article, "Bankers who practice fraud upon their old clients and customers cannot be reached for damages when the fraud is discovered." I say now that the majority opinion, when taken in connection with the quoted testimony found in the dissenting opinion, fully justified that comment, and that the layman, reading the two opinions, could come to no other conclusion.

In the majority opinion in the Doyle Case, it is said: "Evidence was produced in support of these allegations [referring to the allegations of fraud practiced by the bank] on behalf of the plaintiff, and on behalf of the defendant denying the truth of the same. It is conceded that the verdict of the jury is conclusive on the question of the fraudulent representations." In other words, the court said that while it is conceded that the fraudulent representations found by the jury to have been made by the bank to the plaintiff, were made as charged, the bank cannot be reached for damages when the fraud is discovered. If the stock had an illusory market value at the time of sale it might be and in fact was worthless as a permanent investment.

In my dissenting opinion I quoted at some length the fraudulent representations made by Schuyler to Mrs. Doyle, and in commenting upon that testimony I said: "In other words, the bank got rid of a worthless bond that it owned. The jury found that Mr. Schuyler misrepresented the bond as set forth above, and Mr. Gunn admits that for the purposes of this appeal misrepresentations were made by Schuyler, so that the matter needs no further discussion here."

Again in the dissenting opinion it is said that it is decisions such as the majority members of this court are rendering in this action that make the layman lose confidence in courts where the wrong done to another is so obvious, for this court to say that "there is no remedy," brings about a miscarriage of justice. It in effect holds that regardless of the fact that false and fraudulent misrepresentations are made by a bank in the sale of bonds having only an illusory value in fact at the time of the sale on the market even though the stock is valueless as an investment at the time, still the fraud of the plaintiff is held to be remediless. How, then, in view of this language, could this layman come to any different or other conclusion than that four members of this court were upholding the fraud committed by the bank, and that "bankers who practice fraud upon their old clients and customers cannot be reached for damages when the fraud is discovered."

It was brought out at the hearing that it is not an unusual practice for newspapers to comment editorially and in news items upon the decisions of this court before the time for filing the petition for rehearing has expired. Indeed, the witness (Associate Justice) Stewart testified that in the case ofBoepple v. Mohalt, 101 Mont. 417, 54 P.2d 857, the "Helena Independent" published an article commending the majority opinion in that case and condemning in no uncertain terms the writer of the dissenting opinion, the Chief Justice of this court.

It was also brought out that while this editorial was called to the attention of this court and likewise called to the attention of the Attorney General, no action against the "Helena Independent" has been taken. The fact that the editorial in the "Independent" was favorable and commended the majority of the court for the decision rendered would not make it less contemptuous, for the favorable comment might prevent the plaintiff in that action from obtaining a rehearing and might influence the majority members of the court in denying Mrs. Boepple's petition for rehearing. Again, the same witness testified regarding an article appearing in the "Helena Independent" criticizing the Chief Justice of this court in another recent decision, but as in the former case no action has been or will be taken against the "Helena Independent" for the publication of that criticism. I do not quarrel about that, but if we are going to spend our time threatening everybody that criticizes this court or its members, let us remember that what is sauce for the goose is sauce for gander. Let us show no partiality and make our friends come under the same rule as our enemies.

The late President Teddy Roosevelt widely commended the practice of publishing and criticizing court decisions, but he very emphatically impressed his view that these criticisms should be fair and honest. I am opposed to make fish of one and fowl of the other. I do not believe that because the "Western Progressive," an independent newspaper which publishes articles or has adopted a policy with which the members of this court do not agree, struggling to survive the opposition leveled against it by the well-known powerful corporate influences of the state, should be punished and that the "Helena Independent," a newspaper adequately financed which commends the members of the court who are writing the majority opinion in this case, and which paper is supporting the said powerful interests that in a large part dictate the policy of the state, should not only go untouched but be defended by the Attorney General and the members of this court.

Judges should not be too thin-skinned nor conclude that because of the high positions they occupy they are not to be criticized for their official acts. No court has ever maintained, nor will any court ever maintain, the respect to it by clubbing and browbeating and by penalizing the men who criticize them, but such respect can be established and maintained only by the soundness and fairness of decisions and the principles of justice therein enumerated. If we as judges do our duty conscientiously, do equity and justice, we do not need to fear whether or not there is adverse criticism of our actions. Time and the sober judgment of the people will eventually reach a fair analysis and conclusion by the people. When we permit a poor working woman with a crippled husband to be legally robbed of her savings on the most technical of technical grounds, then we must expect criticism, indignation and disrespect of our opinion.

Chief Justice John Marshall did not become the greatest American jurist by sending those men to jail or punishing them for contempt who did not show him the proper deference, but by his great impartiality, fairness and courage, his fearless interpretation of the law, and the enunciation of those great principles of justice which have proven to be the foundation for our governmental structure. The strength of courts lies in the fact that the judges thereof are unmindful of public opinion, and therefore if we are so thin-skinned that we cannot "take it," or that we are influenced by any article which may appear in the newspaper or any "puff of wind," then we may properly be designated as the "five irascible old men," and we should resign and permit courageous men not thus easily influenced to administer justice for this tribunal. If we are to find these defendants guilty for publishing an article such as that in question, then by these same tokens every statement made against the court on the street corner is contemptuous. Are we going to cite into court every man or woman or newspaper who criticizes the court in its decisions? Such a rule or course of conduct smacks too much of Hitler and Mussolini to meet with my sense of fairness and justice. I cannot and will not subscribe to it.

I have long thought that there should be jury trials in contempt cases not committed in the immediate presence of the court, and the proceedings in this case have fortified me in that conclusion. Here two of the Justices of this court saw fit to remove their judicial robes and take the witness-stand as witnesses on behalf of the prosecution and tell of personal differences between them and one connected with the "Western Progressive" some three years prior, and then pass judgment upon the weight of their own testimony. I never liked the idea of a judge being prosecutor, judge and jury in contempt cases, but in the case before us we have unfortunately an added element which makes the practice worse. Here two members of this court, Judges Stewart and Anderson, are not content with being prosecutors, judges and jury, but in their zeal to find the defendant guilty of contempt of this court have become witnesses to personal transactions three years old with one whose connection with this paper was severed over eighteen months ago and who is not a party defendant to this action. In other words, they become prosecutors, witnesses, court and jury, all in one.

It is decisions such as this rendered in the Doyle Case and this proceeding as well that are bringing the courts into disrepute and causing the layman to lose confidence in them; proceedings such as here conducted on the hearing in this cause will do more to hold this court and the members thereof up to public opprobrium, will do more to incite public contempt, will do more to create a feeling in the minds of the people of the state of Montana that the court is partisan, than all of the articles which may be published criticizing the court for decisions it may render in the next decade. In view of the dissenting opinion and the prevailing newspaper headline practices, the article published was on the whole a fair report of the proceedings of this court in the Doyle Case, even though the headline may have followed too closely the statements influenced by the dissenting opinion. The most prejudiced mind cannot say the publication is a false or grossly inaccuratereport.

Section 10944, Revised Codes, reads: "Every person guilty of any contempt of court, of any of the following kinds, is guilty of a misdemeanor: * * * 7. The publication of a false or grosslyinaccurate report of the proceedings of any court." The punishment for a misdemeanor is a fine of not over $500, or six months in jail, or both. This remedy for a "false or grossly inaccurate report" of the proceedings of this court was available to the members of this court or any of them, and should have furnished an adequate remedy if they, or any of them, deemed the article "false or grossly inaccurate," and would have left the guilt to be determined by an impartial jury instead of by the prosecutors themselves acting as such jury. Justices of the supreme court are no more entitled to protection than other citizens. Surely the common juror should be able to decide whether Nelson made false or grossly inaccurate statements. The jury verdict would carry with it respect for law and the feeling that the common citizen had rights protected by the Constitution and by the public authorities whose first duty under the Constitution is to protect all of the people. This remedy is still available, whatever the verdict of the members of this court. Mr. Nelson may be subjected to two punishments for this same offense. Why not dismiss this partisan proceeding and substitute the verdict of a nonpartisan jury? It is not too late.

Section 16 of Article III of our Constitution provides: "In all criminal prosecutions the accused shall have * * * a speedy public trial by an impartial jury." Have these defendants had a speedy trial? This case was heard on April 5th. Many cases of less importance have been heard and decided since that hearing. Why the unusual delay? Can this court ignore the express mandate of the law? Courts by refining and technically construing the law have placed themselves upon a pedestal far above the common citizen and now ignore this and other vital provisions of our fundamental law that every judge is required to swear to protect and defend. Does it not look as if this court was in this instance unwilling to trust a jury where their personal interests are concerned? There is no law authorizing this tyrannical procedure. There is a well-defined statutory and adequate criminal procedure, and also a statutory well-defined civil action that affords ample protection to every judge of this court, two contempt remedies; therefore, this court is without authority or occasion to invent a special procedure for this case, a procedure that transgresses the most fundamental principles of liberty, fair trial, and free press.

Our Constitution, section 10, Article III, also provides: "No law shall be passed impairing the freedom of speech; every person shall be free to speak, write or publish whatever he will on any subject, being responsible for all abuse of that liberty." If any court can assume to itself the power to prosecute, testify and determine the question of whether or not any publication is libelous, what further use have we for that fancied protection of our constitutional rights? By this proceeding the boasted equality of all citizens before the law is wafted to the winds by the very officials that should be the most respected of all officers of this state, the Justices of the supreme court; officers that are presumed to be the most impartial. Again let me urge that this action be abandoned and replaced by a trial by an impartial jury.

But there is, in my opinion, another unanswerable reason why this case should be dismissed; a reason not heretofore advanced or argued. The defendants are charged with publishing this article while the case was still before the court. I call attention to the fact that the decision in the Union Bank Case had been rendered and filed before the publication of the alleged contemptuous article. It is claimed a motion for rehearing was pending; such was not the case. The motion for rehearing was not filed until after the publication of the alleged contemptuous article. There was no statute authorizing a rehearing of the bank case. The rehearing motion was based solely upon a rule of this court. The rule for rehearing is of doubtful authority, and in any event should not constitute notice to these defendants that a motion for rehearing could or would be made. Newspapers assume the decision to be final and publish reports of cases in which the opinions are without reference to the time within which motions may be made for rehearing. It is conceded that if the action in the bank case was not pending at the time of the publication of the alleged contemptuous article then this court had no jurisdiction to bring this proceeding.

If newspapers are required to take notice of a rule of court authorizing a rehearing and all orders extending the time for filing such motions (a frequent practice), then the right of comment, the time when comment may safely be made, is made so burdensome that it practically restricts publication of comment, particularly to newspapers not having ready access to the supreme court records. The practical effect of such court rule is to nullify that provision of the Constitution which assures the right of free speech. Since there is no law extending the time and no proof that the defendant knew the time for final action had been extended, his criminal intent in commenting on theDoyle Case was not proved; therefore, the publication in question of this court decision could not give this court jurisdiction, and for this reason as well as the reason that the article was not contemptuous, the defendant cannot be found guilty. There is no statute authorizing this summary action to be heard before this court by the members of the court as the jury in the case; the alleged contempt referred to a case not then pending before the supreme court and was wholly beyond the jurisdiction of this court. I therefore insist the proceeding should be dismissed.

I call attention in particular to the very pertinent case ofState ex rel. Metcalf v. District Court, supra, and append three extracts from cases in other jurisdictions therein quoted with approval: "The publication by this relator is hardly susceptible of classification as a report of court proceedings. If it offends, it is because it libels the judge and scandalizes the court; but the offense of `scandalizing the court,' as understood at common law, is unknown to our jurisprudence, particularly since the adoption of the Constitution, and ample provision is now made for redress for libel, by civil action. The supreme court of Kansas has said [In re Pryor, 18 Kan. 72, 26 Am. Rep. 747]: `No judge, and no court, high or low, is beyond the reach of public and individual criticism. After a case is disposed of, a court or judge has no power to compel the public, or any individual thereof, attorney or otherwise, to consider his rulings correct, his conduct proper, or even his integrity free from stain, or to punish for contempt any mere criticism or animadversion thereon, no matter how severe or unjust.' * * *

"The supreme court of North Carolina has recently receded from the position taken in the Moore Case [63 N.C. 397] above. While challenging the authority of the legislature to destroy or sensibly impair the power of a court to punish for contempt, the court treated a recent statute of that state upon the subject of contempt as follows: `Having reference to the history of this statute, the context, and the language employed, it was clearly the purpose and meaning of the Act to restrict the power of the court, in this last respect, to the publication of grossly inaccurate reports about a trial or other matter still pending, and, this being in our view the proper and only permissibleoccasion for the exercise of such a power in reference to thesepublications, we are of opinion that the provision of the statute should, in this respect, be upheld as written, and the power to punish summarily for defamatory reports and criticisms,about a matter that is past and ended, no longer exists.' (Inre Brown, 168 N.C. 417, 84 S.E. 690.) In 6 Ruling Case Law, 512, the modern American doctrine is tersely stated as follows: `At common law the mere writing contemptuously of the judge of a superior court was a constructive contempt, but this doctrine has not been fully adopted in this country and has been limited by our constitutional guaranties of free speech and liberty of the press to pending cases.' * * *

"The most cogent reason exists for restraining a false publication concerning matters pending in court, where the administration of the law may be impeded or justice actually defeated, and the interests of the publc are sufficiently involved to warrant classifying such a contempt as a crime. But we cannot believe that the legislature ever intended to denounce as a crime every false or grossly inaccurate report concerning causes finally determined, when no public interest can suffer as a consequence of the publication. If it be contempt of court and a crime to publish a false report concerning a cause finally decided a week or a month ago, the offense is equally as great if the false report concerned the proceedings taken in the most trivial cause a year ago."

Cause taken to Supreme Court of the United States on appeal.

NOTE. — At the time fixed in the opinion of the majority of the court for pronouncement of judgment, a fine of $250 was imposed upon the Western Progressive Publishing Company; contemnor John W. Nelson being sentenced to imprisonment in the county jail of Lewis and Clark county for the term of one day. Petition for appeal to the Supreme Court of the United States was at once presented in behalf of John W. Nelson, allowed and bond for $300 filed. On January 27, 1937, contemnor Nelson in open court stated that his appeal to the United States Supreme Court had been abandoned, offered his apology for his transgression of its rules, and petitioned the court for a remission of the jail sentence imposed upon him; whereupon the court ordered that such sentence be remitted and stricken from the judgment.