filed: September 25, 1981.
COMMONWEALTH OF PENNSYLVANIA
CHARLES W. OHLE, APPELLANT (TWO CASES). COMMONWEALTH OF PENNSYLVANIA V. RONALD J. JACKSON, APPELLANT
Appeal from the Judgment of Sentence of the Court of Common Pleas, Dauphin County, Criminal Division, at No. 1179 Criminal Division, 1975. Appeal from the Judgment of Sentence of the Court of Common Pleas, Dauphin County, Criminal Division, at Nos. 1171, 1173, 1174 Criminal Division, 1975. Appeal from the Order of Court of the Court of Common Pleas, Criminal Division, Dauphin County, at Nos. 1171 and 1173 Criminal Division 1975.
Smith B. Gephart, Harrisburg, for appellants.
Marion E. MacIntyre, Assistant District Attorney, Harrisburg, for Commonwealth, appellee.
Cercone, President Judge, and Watkins and Montgomery, JJ.
[ 291 Pa. Super. Page 113]
Appellants Ohle and Jackson were charged with theft by failure to make required disposition of funds received,*fn1 bribery in official and political matters,*fn2 and conspiracy to commit bribery.*fn3 In June of 1977 Ohle and Jackson were tried jointly on the theft charges. The Commonwealth won convictions on those charges against both men. Each was subsequently sentenced to the payment of a fine of $1,000 plus the costs of his prosecution, restitution to the Commonwealth of $304,500.00, and to a term of imprisonment of from three to five years. Ohle has appealed the judgment of sentence against him at No. 106 March Term, 1978. Jackson has appealed the judgment of sentence against him at No. 103 March Term, 1978.
On the conspiracy and bribery charges a joint trial was begun November 15, 1977. Jackson became ill during this trial, was ruled unable to continue, and a mistrial motion was granted in his favor. As to Ohle, however, the trial continued. He was convicted on both the conspiracy and the bribery counts. For the conspiracy conviction the court sentenced Ohle to payment of a fine and a term of imprisonment
[ 291 Pa. Super. Page 114]
of from one to two years, to run concurrently with the prison sentence imposed in the theft case. On the bribery conviction the court imposed on Ohle a sentence of six to twelve months imprisonment, which was also to run concurrently with the other prison sentences imposed for the theft and conspiracy convictions, and it also imposed a fine of $500. He has appealed from the convictions on the conspiracy and bribery charges.
Because these three appeals, two by Ohle and one by Jackson, are based generally on the same facts, they were consolidated for purposes of briefing and argument. For convenience sake, we have set out the facts in a single narrative. However, we discuss the legal issues presented separately.
Appellants Ohle and Jackson were insurance brokers with both the firms of Charles W. Ohle, Inc. and O. & R. Excess, Inc., which were brokerages licensed to do business in New York. Charles W. Ohle, Inc., was licensed to do business in Pennsylvania as well. Prior to June 30, 1972 Anthony J. Trucco, then Director of the Commonwealth's Bureau of Insurance and acting pursuant to a plan developed by Frank C. Hilton, then the Commonwealth's Secretary of Property and Supplies, arranged for the renegotiation of the insurance policy covering the Commonwealth's 26,000 automobile fleet. The policy was renegotiated because Trucco and Hilton saw in it a likely opportunity to provide them with an illegal source of revenue through the appointment of a broker who would provide them with a kickback from part of the broker's commission. In February of 1973 Trucco met appellants and discussed the kickback scheme. He told them that the appointment could only be made by Hilton but that he would recommend them to Hilton. He did not reveal Hilton's connection with the scheme. Appellants agreed to the kickback scheme as outlined to them by Trucco. Later that month Hilton appointed appellants' firm, Charles W. Ohle, Inc., broker of record on the renegotiated automobile insurance policy.
[ 291 Pa. Super. Page 115]
The first premium payment in question was delivered to an agent of appellants' in Harrisburg on July 25, 1974 and transported to New York. It was in the form of a check in the sum of $500,000 and made payable to Charles W. Ohle, Inc. and Market Facilities, Inc. (Market Facilities, Inc. was an affiliate of the insurance company which actually carried the policy.) An officer of the insurance company purportedly gave appellant Ohle authority to endorse the Commonwealth's premium checks for Market Facilities. This first check of $500,000 was endorsed by Ohle pursuant to this purported authority, and by his firm, and deposited in a firm account. A second check in the amount of $300,000 was delivered to an agent of appellants in Harrisburg and transported to New York on August 5, 1974. It too was endorsed by Ohle pursuant to the same authority, and by his firm, and deposited in a firm account. Rather than turning the premiums less broker's commission immediately over to the insurance company the $800,000 was used by appellants as collateral on a short term loan from a Florida bank. For unexplained reasons appellants defaulted on the Florida loan and the bank seized the collateral. The $800,000 never reached the insurance company's coffers and it eventually cancelled Pennsylvania's automobile fleet insurance policy.
Shortly after the cancellation of the insurance policy an article appeared in a Harrisburg newspaper concerning a claim by one Mr. Devine, a former employee of Ohle, that he had knowledge of a bribery scheme between Ohle and Jackson on one side and Hilton and Trucco on the other. On the same day, an FBI agent visited the offices of the Commonwealth's Department of Justice and notified state authorities of the federal investigation. Acting upon this information, Edward Golla, Chief Investigator for the Pennsylvania Department of Justice began an investigation. Soon Golla had in his possession statements by Noel Bernard, an employee of the insurance company, pertaining to the theft, bribery and conspiracy charges, as well as statements by other Commonwealth employees concerning appellants' participation in the scheme. Subsequently, appellants were
[ 291 Pa. Super. Page 116]
granted use immunity pursuant to the federal statutes by the U.S. District Court for the Middle District of Pennsylvania. See 18 U.S.C. § 6002. The Commonwealth's investigation continued; investigators received statements by Trucco which further implicated appellants in the bribery and conspiracy scheme. The appellants thereupon entered into a plea bargain with the district attorney of Dauphin County. On the basis of the plea bargain appellants waived their extradition and were arraigned on the charges brought against them. Appellants later gave statements to the district attorney and in federal court at the trial of Frank C. Hilton, former Secretary of the Department of Property and Supplies. Subsequent thereto the grand jury of Dauphin County approved Bills of Indictment against them. Thereafter the district attorney notified appellants of his decision to withdraw the plea bargain and to prosecute them fully. Appellants made divers and diverse pre-trial motions, among which was a motion to quash the indictments because they were allegedly based on information gained as part of the withdrawn plea bargain. The court held that the evidence presented to the grand jury had been independently gathered and therefore refused to quash the indictments. Trials on the various charges were held in June and October of 1977, which resulted in the convictions of appellants as above set out. These appeals followed.
Appellants have assigned numerous errors. Because of the disposition we make today of these cases, we need not consider all the questions raised.*fn4
[ 291 Pa. Super. Page 117]
We address first the question of whether the court erred in refusing to quash the indictments. Appellants both contend that the indictments on all the counts should have been quashed because they contain substantive defects.*fn5 They argue that they were improperly indicted under the Crimes Code and that they should have been indicted under the Penal Code. They argue further that the indictments were in violation of Section 2 of the Act of December 6, 1972, P.L. 1482, No. 334, and that because violation of the Act of 1972 constitutes a substantive defect the indictments ought to have been quashed. Section 1 of the Act of December 6, 1972 amended Title 18 of the Pennsylvania Consolidated Statutes creating the Crimes Code of Pennsylvania. Section 2 of the Act is a savings clause which ensured the vitality of the Penal Code, and required prosecution under its provision of any crimes the elements of which arose before the Act's effective date. Section 2 of the Act reads:
Title 18 of the Consolidated Pennsylvania Statutes (relating to crimes and offenses), as added by this act, does not apply to offenses committed prior to the effective date of this act and prosecutions for such offenses shall be governed by the prior law, which is continued in effect for that purpose, as if this act were not in force. For the purposes of this section, an offense was committed prior to
[ 291 Pa. Super. Page 118]
the effective date of this act if any of the elements of the offense occurred prior thereto.
Act of Dec. 6, 1972, P.L. 1482, No. 334, § 2. Appellants contend that elements of the crimes of theft, bribery and conspiracy, of which they have been variously convicted, arose prior to the June 6, 1973 effective date of the Crimes Code. We begin by considering the indictments against Ohle on the bribery and conspiracy charges of which he was ultimately convicted,*fn6 and then we shall consider the indictments against both Ohle and Jackson on the charges of theft by failure to make required disposition of funds received.
Ohle contends that it was error to have refused to quash the indictments against him alleging violations of Crimes Code Sections 4701 (bribery) and 903 (conspiracy). His argument is based on the contention that elements of the alleged crimes arose prior to the effective date of the Crimes Code, and consequently that the indictments against him were faulty for their failure to allege violations under the Penal Code of 1968 rather than under the dictates of the Crimes Code of 1972. We agree and accordingly vacate the judgment of sentence relating to charges of bribery and conspiracy, reverse the conviction and quash the indictment against him.
Pennsylvania Crimes Code Section 4701 reads:
BRIBERY IN OFFICIAL AND POLITICAL MATTERS
(a) Offenses defined. -- A person is guilty of bribery, a felony of the third degree, if he offers, confers or agrees to confer upon another, or solicits, accepts or agrees to accept from another:
(1) any pecuniary benefit as consideration for the decision, opinion, recommendation, vote or other exercise of
[ 291 Pa. Super. Page 119]
discretion as a public servant, party official or voter by the recipient;
(2) any benefit as consideration for the decision, vote, recommendation or other exercise of official discretion by the recipient in a judicial, administrative or legislative proceeding; or
(3) any benefit as consideration for a violation of a known legal duty as public servant or party official.
(b) Defenses prohibited. -- It is no defense to prosecution under this section that a person whom the actor sought to influence was not qualified to act in the desired way whether because he had not yet assumed office, had left office, or lacked jurisdiction, or for any other reason.
18 Pa.C.S. § 4701. Once the offer to confer the proscribed benefit, or once the agreement is made, the crime is complete. There need be no waiting for the benefit actually to be conferred. Cf. United States v. Davis, 576 F.2d 1065 (3rd Cir., 1978), cert. denied, 439 U.S. 836, 99 S.Ct. 119, 58 L.Ed.2d 132 (1978). Instantly, it is clear from the indictment itself, as well as from the evidence at trial, that the agreement to confer the proscribed benefit upon Trucco was reached no later than February of 1973, fully five months before the June 6, 1973 effective date of the Crimes Code provision. See Act of December 6, 1972, supra.
The Commonwealth argues that the elements of the offense prohibited by the Crimes Code and elements of the corresponding Penal Code offense are identical, and that therefore there was no defect, either informal or substantive, and hence that there arose neither the necessity of amending the indictment nor reason to quash it. We disagree. Section 4303 of the Penal Code reads in pertinent part:
Bribery of Government officers and employees; judges, jurors, etc.
Whoever shall directly or indirectly, or by means of and through any artful and dishonest device whatever, give or make any promise, contract or agreement, for the payment, delivery, or alienation of any money, goods or other
[ 291 Pa. Super. Page 120]
thing, in order to obtain or influence the vote, opinion, verdict, award, judgment, decree, or behavior of any member of the General Assembly, or any officer or employee of this Commonwealth, or of any political subdivision thereof, or any judge, juror, justice, referee or arbitrator, in any bill, action, suit, complaint, indictment, controversy, matter or thing whatsoever, depending or which shall depend before him or them, is guilty of bribery, a misdemeanor, and on conviction thereof, shall be sentenced to pay a fine not exceeding five hundred dollars ($500), or to undergo imprisonment by separate or solitary confinement at labor not exceeding one (1) year or both.
18 P.S. § 4303. (Emphasis added). The Penal Code provision permits an affirmative defense: in order for culpability to exist, the action sought to be influenced by the offeror of the bribe must be one which the offeree of the bribe could affect. The potential for an affirmative defense under Penal Code Section 4304 undeniably distinguishes it from Crimes Code Section 4701. The Commonwealth's failure to indict Ohle under the Penal Code clearly constituted a defect in the indictment. The prejudice which arises out of a defect in the indictment which denies a potential defense against the charges cannot be gainsaid.*fn7 Thus, it was error not to have quashed the bribery indictment. Likewise, since the conspiracy indictment is based on the same facts, and was brought under Crimes Code Section 903 and not under the Penal Code, it too should have been quashed and it was error not to do so.
Ohle and Jackson were convicted of violating Crimes Code Section 3927 (theft for failure to make required disposition of funds received). Section 3927(a) reads:
[ 291 Pa. Super. Page 121]
(a) Offense defined. -- A person who obtains property upon agreement, or subject to a known legal obligation, to make specified payments or other dispositions, whether from such property or its proceeds or from his own property to be reserved in equivalent amount, is guilty of theft if he intentionally deals with the property obtained as his own and fails to make the required payment or disposition. The foregoing applies notwithstanding that it may be impossible to identify particular property as belonging to the victim at the time of the failure of the actor to make the required payment or disposition.
18 Pa.C.S. § 3927(a). This Court first considered Section 3927 in Commonwealth v. Crafton, 240 Pa. Super. 12, 367 A.2d 1092 (1976). In Crafton we outlined the elements of the crime which is theft by failure to make required distribution of funds received. The elements of the crime, as we stated them there are:
"1. The obtaining of property of another;
2. Subject to an agreement of known legal obligation upon the receipt to make specified payments or other disposition thereof;
3. Intentional dealing with the property obtained as the defendant's own; and
4. Failure of the defendant to make the required disposition of the property."
Id., 240 Pa. Super. at 16, 367 A.2d at 1094-96. And see Commonwealth v. Austin, 258 Pa. Super. 461, 466, 393 A.2d 36, 38 (1978).
Appellants do not deny that they received the property of another; they fully acknowledge receipt of the premiums paid by the Commonwealth. Rather, their attack on the validity of the indictment charging them with the crime of theft by failure to make required disposition of funds received, as proscribed under Section 3927, goes to the second element of the offense: "subject to agreement or know legal obligation." Appellants contend that the legal obligation which made out this element of the offense is the agreement whereby they became brokers of record on the automobile
[ 291 Pa. Super. Page 122]
fleet insurance policy. In this they are correct. However, they also contend that since the agreement arose prior to June 6, 1973, and since it is an element of the offense, then they should have been charged under a provision of the Penal Code and not under Section 3927 of the Crimes Code. Although the argument is persuasive we cannot accept it. Logically, the occurrence which triggers the applicability of Section 3927 is not the initiating of a legal obligation, but rather, the receipt of the property of another pursuant to that obligation. Although the legal obligation must necessarily be pre-existing or co-eval, with the receipt of the other party's property, logically, no element of the crime could be said to arise until the property has exchanged hands pursuant to the agreement creating the obligation. Thus, in considering the time the crime began, that is, in order to determine whether prosecution under Section 3927 was proper, we must logically read the first two elements of the crime as delineated in Commonwealth v. Crafton as one element. Therefore, as regards the application of Section 2 of the Act of December 6, 1972 to Section 3927 of the Crimes Code there should be only three elements to consider:
1. obtaining property of another upon agreement or known legal obligation to make specified payment or other disposition;
2. intentional dealing with the property as one's own; and
3. failure to make the required disposition of the property.
Any other reading of said Section 3927 of the Crimes Code, as Section 2 of the Act of 1972 applies to it, would give a vitality and longevity to the Penal Code which the Legislature cannot rationally have intended.*fn8
Appellants received the premium payments on July 25 and August 5, 1974. Receipt was made subject to a known
[ 291 Pa. Super. Page 123]
legal obligation. As thus interpreted, no element of the offense arose prior to the effective date of the Crimes Code. Appellants were properly indicted under 18 Pa.C.S. § 3927 and thus there was no error in refusing to quash the indictments, at least insofar as the time element is concerned.
Appellants next assert that it was error not to have suppressed certain evidence. They contend this evidence came into the hands of the Commonwealth solely as a result of their cooperation with the Dauphin County District Attorney pursuant to the plea bargain agreement entered into April 26, 1975 and dishonored by the District Attorney January 13, 1976 for appellants alleged noncompliance with its terms. Although they have contended that this evidence should have been suppressed as to both the bribery and conspiracy indictments and the indictments for the theft for failure to make required disposition of funds received, our quashing of the bribery and conspiracy indictment against Ohle has obviated the need to consider the suppression question in regard to that indictment. Our discussion of this question thus applies only to the theft indictments.
As appellants have framed their question, we are asked to consider whether the suppression court erred in finding that the Commonwealth presented sufficient evidence to establish that the evidence presented to the Grand Jury, and later to the petit juries at trial, was restricted to the evidence placed under seal of court April 1, 1975, and contained nothing obtained subsequent to the plea bargain agreement.*fn9
[ 291 Pa. Super. Page 124]
In suppression hearings the Commonwealth bears both the burden of going forward with the evidence, Commonwealth ex rel. Butler v. Rundle, 429 Pa. 141, 239 A.2d 426 (1968), and see Pa.R.Crim.P. 323(h), as well as the burden of persuasion, Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), and see Commonwealth ex Page 124} rel. Butler v. Rundle, supra. The standard by which we measure sufficiency of the evidence in suppression hearings is that of preponderance of the evidence. Commonwealth ex rel. Butler v. Rundle, supra. It is clear from the record of the suppression hearing that the Commonwealth met its burden by a preponderance of the evidence. There was no error in refusing to suppress evidence because it was clearly established that it was properly obtained and untainted.*fn10
The last question we address pertains solely to Ohle and Jackson's convictions for theft. The question raised is jurisdiction, and the assertion made is that if a crime occurred it occurred in New York and not in Pennsylvania, and that therefore the courts of the Commonwealth have no jurisdiction to try the case.
The common law rule of subject matter jurisdiction in criminal matters was that a prosecution could not be brought unless the "gist" of the offense occurred within the prosecuting jurisdiction. See Comment to Section 1.03, Model Penal Code, T.D. 5, (from which 18 Pa.C.S. § 102 is derived). Often, as in the case of common law larceny, legal fictions were created which altered the essential elements of the offense to permit prosecution in the county where the defendant was apprehended instead of where the crime actually occurred. The courts of this Commonwealth long ago rejected the notion that these legal fictions, or non-essential
[ 291 Pa. Super. Page 125]
elements of the offense, could give rise to subject matter jurisdiction in our courts where the essential elements of the crime occurred in another state. Commonwealth v. Simmons, 5 Binn. 617 (1813) (one who steals goods in another state and brings them into this one cannot be found guilty of larceny, although one might be found guilty of bringing stolen goods into this state if statute so provided). We recently had occasion to discuss much the same question in Commonwealth v. Bertels, 260 Pa. Super. 496, 394 A.2d 1036 (1978), aff'd 491 Pa. 189, 420 A.2d 405 (1980). There we quoted from the authorities on the question of subject matter jurisdiction in criminal cases:
In many cases requisite elements of the completed crime may be committed in different jurisdictions, and in such cases any state in which an essential part of the crime is committed may take jurisdiction. It is necessary, however, to discriminate with great care between acts essential to the crime and acts merely incidental thereto. For example, the mere forwarding of money from one state to another for the purchase of futures, for wagering on a horse race, or for any similar transaction forbidden by the laws of the former state, does not constitute a crime punishable therein, although it is otherwise if the statute makes the forwarding of the money, and not merely the transaction itself, a crime. 4 Wharton's Criminal Law and Procedure § 1507 at 88 (1957) (emphasis supplied; footnotes omitted).
Id., 260 Pa. Super. at 502, 394 A.2d at 1039. See also 21 Am.Jur.2d, Criminal Law § 385.
Jurisdiction in Criminal Matters.
The territorial applicability of the Pennsylvania Crimes Code is set out in Section 102; the section defines the territorial scope of the Crimes Code and delimits the exercise of subject matter jurisdiction in criminal matters by our courts. As that section relates to the prosecution of appellants under Crimes Code Section 3927 the Commonwealth argues the following provisions are pertinent:
[ 291 Pa. Super. Page 126]
§ 102. Territorial applicability
(a) General rule. -- Except as otherwise provided in this section, a person may be convicted under the law of this Commonwealth of an offense committed by his own conduct or the conduct of another for which he is legally accountable if either:
(1) the conduct which is an element of the offense or the result which is such an element occurs within this Commonwealth;
(5) the offense consists of the omission to perform a legal duty imposed by the law of this Commonwealth with respect to domicile, residence or a relationship to a person, thing or transaction in this Commonwealth; . . .
18 Pa.C.S. § 102(a)(1) & (5). We may eliminate Section 102(a)(5) as a potential basis for the exercise of jurisdiction since it is clear that subsection 5 was intended to reach outside the territorial limits of Pennsylvania to prosecute those who had a duty or obligation which must necessarily have been performed within our boundaries and failed to do so. See Comment to Section 1.03, Model Penal Code, T.D.5, pp. 7-8; see also S. Toll, Pennsylvania Crimes Code Annotated, § 102 at 6 (1974).*fn11 The remaining statutory basis for the exercise of jurisdiction in this case is Section 102(a)(1) which provides for subject matter jurisdiction where an element of the proscribed activity occurs within the Commonwealth. The essential elements of the offense prohibited
[ 291 Pa. Super. Page 127]
by Section 3927 are: 1) receipt of another's property, 2) subject to agreement or known legal obligation, 3) the intentional dealing with the property as the recipients own, 4) and failure to make disposition of the property required by the agreement or legal obligation. See Commonwealth v. Crafton, supra.*fn12
Appellants argue that the first two elements are merely incidental to the crime charged. Their argument is two-pronged. First, they argue that the exercise of jurisdiction under Section 102 requires that some "element of [the] offense" have occurred in Pennsylvania, that "element of an offense" is defined in Crimes Code Section 103 as "conduct or attendant circumstances," that Section 103 defines "conduct" as "an action or omission and its accompanying state of mind," and that since Section 3927, supra, makes no requirement concerning the accompanying state of mind at the time of receipt of the property then receipt cannot constitute an "element of [the] offense" such that subject matter jurisdiction will attach. The argument cannot succeed; Section 3927 specifically requires that receipt of the property be accompanied with knowledge of an agreement or legal obligation to dispose of the property in a certain fashion. Secondly, appellants argue that since the receipt of the premium payments and the underlying brokerage agreement were legal they cannot constitute essential elements of the offense, even though "included in the description of the forbidden conduct in the definition of the offense" ("element of an offense," 18 Pa.C.S. § 103) but are merely incidental thereto. This argument ignores the fact that legal receipt or possession of another's property has always been an essential element of crimes in the nature of conversion and embezzlement. Therefore, we conclude that the lower court did not err in refusing to dismiss the indictments for lack of jurisdiction.
[ 291 Pa. Super. Page 1282]
Jurisdiction as Question of Fact.
We next consider the correctness of the trial courts rulings on the submitted points for charge. This question also addresses the jurisdiction of the court.
"It is, of course, the law that 'the locus of a crime is always in issue, for the court has no jurisdiction of the offense unless it occurred within the county of trial . . . .'" Commonwealth ex rel. Chatary v. Nailon, 416 Pa. 280, 283, 206 A.2d 43, 45 (1965) quoting from Commonwealth v. Mull, 316 Pa. 424, 426, 175 A.2d 418, 419 (1934). Normally, the question is one of law and left to the trial judge to decide, but on rare occasions jurisdiction depends on the resolution of disputed facts. In those cases the question should be put to the jury upon proper instructions and failure to give such proper instructions may constitute reversible error. Commonwealth v. Mull, id.; Commonwealth v. Bighum, 452 Pa. 554, 307 A.2d 255 (1973).
Instantly, there were questions of fact in dispute which would have solved the jurisdictional riddle if the court had properly put them to the jury. The primary fact in dispute was, of course, whether appellants had discharged their obligation to the Commonwealth in accordance with the law. The determination of that question required first the determination of several lesser questions: in what capacity did appellants receive the insurance premiums; in what capacity did they endorse the checks; in what capacity did they deposit the monies in their account; in what capacity did they later remove the funds. Had all of this occurred in Pennsylvania there would be no problem: the standards by which appellants' actions would be measured would be the standards set up by the law of Pennsylvania. However, much of the alleged criminal activity occurred in New York and not in Pennsylvania. Although the premium checks were written in Pennsylvania by the Commonwealth, the broker, the insurance companies, and the bank into which the checks were deposited were all out of state. Most of
[ 291 Pa. Super. Page 129]
these lesser questions revolve around appellants' legal status vis-a-vis the New York insurance companies. It was necessary that their status in this regard have been determined before the ultimate determination of their criminality. Furthermore, that determination ought to have been made applying New York law, because it is New York which has an interest in regulating local insurance business and in defining the legal ramifications of actions within the territorial confines of New York and not Pennsylvania. See Leflar, Conflict of Laws: Choice of Law in Criminal Cases, 25 Case Western Res.L.Rev. 44 (1974).*fn13
[ 291 Pa. Super. Page 130]
To that end, appellants submitted points for charge. The court accepted part of each point submitted but refused to charge the jury on the remainder. The points as submitted read:
Under the law, endorsement of a check by the proper person to make such endorsement constitutes an actual and legitimate payment of an obligation. (citations omitted) If you find from the evidence that either Defendant had the authorization of officers of The Market Facilities, Inc. to endorse said company's name on the checks of the Commonwealth and deposit them in the bank account of Charles W. Ohle, Inc., then you must find that payment was made to the insurance company, and you must find Defendants not guilty.*fn14
[ 291 Pa. Super. Page 131]
Under the Insurance Law of the State of New York when an insurance company entrusts its policies to a broker for delivery to the insured, the broker acts as an agent for the insurance company in collecting and receiving premiums, and payment to the broker is deemed payment to the insurance company. (citations omitted) Therefore, if you find that Defendants received payment of the insurance premium from the Commonwealth of Page 131} Pennsylvania, you must find that the obligation of the Commonwealth of Pennsylvania was discharged, because payment to the broker was payment to the insurer. Any subsequent failure to transmit moneys to the insurance company would not constitute a violation of the criminal statute under which Defendants are charged.*fn15
The trial judge read to the jury the first sentence of each of these suggested charges but refused to read the second parts of each. By refusing to read the second parts of these charges the trial judge was essentially refusing to submit the jurisdiction-related question presented thereby to the jury for its determination. Clearly this was error, for such a refusal denied the jury the opportunity to determine the Commonwealth's jurisdiction over appellants' action, for, although the submitted points for charge address other issues, the determination of those issues goes directly to the heart of the court's jurisdiction. The jury should have been permitted to decide whether or not Charles W. Ohle, Inc. acted as agent of Market Facilities, a New York insurance company, in accepting the premium payments, and as its agent in endorsing the checks. Such a determination by the jury was crucial. If appellants acted as agents for Market Facilities, as that relationship is defined by the law of the State of New York, then appellants' obligations to Pennsylvania were fulfilled insofar as Pennsylvania is concerned in the matter both as insured and as sovereign. If appellants acted in accordance with those provisions of the law of New York there could have been no crime under Section 3927, supra, and no jurisdiction in our courts to prosecute appellants failure to pay the monies over. This is so because once the checks were negotiated by appellants as agents for the insurance company and deposited in appellants' account, under New York law the monies would no longer be payments on the premium yet to be transferred to the insurance company, but funds held by appellants for their principal, the insurance company. On the other hand, if there was no
[ 291 Pa. Super. Page 132]
authority in appellants to act on behalf of the insurance company, either as agents in accepting payment or as agents authorized to endorse and cash the check, then the jury could properly consider the question of appellants alleged violation of our criminal statutes since the money would not legally or actually have reached the insurance company. In short, properly the jury should have been allowed to consider the effect of the New York laws and directed to find appellants not guilty of violation of the Pennsylvania statute if their actions were in conformity with the law of New York. It was error not to have charged the jury as requested and a new trial must therefore be granted.*fn16
In the appeal by Jackson, at no. 103 March Term 1978, (theft for failure to make required distribution of funds received) judgment of sentence is vacated, the conviction is reversed, and the case is remanded for new trial not inconsistent with this opinion.
In the appeal by Ohle, at no. 106 March Term 1978, (theft for failure to make required distribution of funds received) judgment of sentence is vacated, conviction is reversed, and the case is remanded for new trial not inconsistent with this opinion.
In the appeal by Ohle, at no. 119 March Term 1979, (bribery and conspiracy) judgment of sentence is vacated, the conviction is reversed, and the indictment quashed.
Jurisdiction relinquished in all three cases.