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Senator ERVIN. Well, do you not consider, though, that there is a conflict there, that the courts would
Mr. SOBELOFF. Of course, the Court can fashion its own decrees, but the Court showed a reluctance by its own decree it showed every disposition to consult the people affected, by inviting them to present their views as to how to implement the earlier decisions.
Senator ERVIN. Would you not read an implication in the decision, that the Court will step in and prescribe a method?
Mr. SOBELOFF. I do not believe that there is such implication, any more than in any case where the Court has made a decision and then invites the parties, the litigants, to indicate their views as to just what the decree is.
If the party refuses, declines the invitation, then, of course, there is the possibility that the Court will frame its own decree. That, of course, is always present, but that is not the
Senator ERVIN. You do not consider that that decision and its antecedent decisions imply that the Court is to undertake to prescribe how its interpretation of the 14th amendment will be enforced if the school districts do not come up with a plan to the satisfaction of the Court? Mr. SOBELOFF. I suppose that the Court would, if the districts refuse to give information as to what they plan to do, can form its own decrees; but the Court was showing a solicitude for the feelings and ideas of the people with whom it was dealing, by inviting them to indicate to the Court how they thought the decree should be phrased. Senator ERVIN. Well, how do you reconcile such a position on the part of the Court, such possible action on the part of the Court with the provision of the 14th amendment which confers the power to enforce its provisions upon the Congress, in the light of the statutory rule of construction that the exclusion of one expression is putting an exclusion on another?
Mr. SOBELOFF. Senator, there is a long debate as to just what Congress can do to implement the 14th amendment. You have got that question up in the civil rights legislation now and that would be the appropriate time for debate on it.
Certainly, I will not disagree with this, that when a court, having taken jurisdiction over a question and have made the decision, it has the power and the duty to issue a decree implementing that decision, but the Court proceeded with consideration for the parties by inviting them to say what they thought the decree should be-I don't think that anyone could take exception to that. Anyway, that is what the Supreme Court did.
Senator O'MAHONEY. Mr. Sobeloff, may I ask you this question, in the hopes that it may bring the issue to a point.
Do you agree that under the 14th amendment Congress can pass legislation which would settle the issue and which would be enforceable by the President of the United States?
Mr. SOBELOFF. Congress certainly has the power which is specifically expressed in the Constitution, in the 14th amendment.
Senator O'MAHONEY. And if the Congress should act, would it not be the duty of the President to enforce the law?
Mr. SOBELOFF. It is the duty of the President to enforce all the laws and if the Congress acts within its sphere of authority, the Government as a whole is bound by that.
Senator O'MAHONEY. Now, is there any difference between the enforcement of a statute passed by Congress under the 14th amendment and the enforcement of a decree of the Court, without legislation?
Mr. SOBELOFF. The executive department would be bound by either directive, but where there is a dispute as to what the legislation means, of course, the Court has the judicial power to render interpretations. Senator ERVIN. In other words, under your interpretation, either the Court or the Congress has the right to prescribe how the 14th amendment would be enforced?
Mr. SOBELOFF. But, I am not in position now, and I know you would not expect me to be, to give an essay on the extent of the power, or how the branches of the Government would integrate their powers.
Senator ERVIN. Well, that is your statement
Mr. SOBELOFF. There have been, since the passage of these amendments in 1868, many cases in which the courts have dealt with the matter and there has been due process which provides for payment, due process, and there have been numerous instances where Congress has passed laws in regard to that, and also, where the courts have interpreted those laws and have issued decrees to give effect to their decisions.
Senator ERVIN. I don't believe that that is quite responsive, though, to my question, which was: Do you express the opinion that you think either the Court or Congress can make and carry out or devise methods to enforce the 14th amendment?
Mr. SOBELOFF. I would say that both the Court and the Congress have authority in that area. As to the exact limitation
Senator O'MAHONEY. Well, I think the interrogator and the interrogatee are not talking in the same sense, because Senator Ervin asked if you believe that the Court has the right to devise methods to enforce the decree
Mr. SOBELOFF. I do.
Senator O'MAHONEY. Do you think the Court would have the power to call out the Army or the Navy to enforce the decree?
Mr. SOBELOFF. Well, that is not a thing that I ought to speculate on, whether the Court would call out the Army or the Navy.
The executive branch is in charge of the Army and the Navy and the courts do not have the power of the sword or the purse.
Senator O'MAHONEY. Well, that is the doctrine of separation of
Senator O'MAHONEY. So the Court could not do that?
Mr. SOBELOFF. The Court could not call out the Army, itself.
Senator O'MAHONEY. Well, then, in answering Senator Ervin, you must bear in mind what his question was, which is whether the Court could devise means to enforce the decree.
Mr. SOBELOFF. It can decide how the decree can be enforced but in the last analysis it cannot command the Army or the Navy or Senator O'MAHONEY. Or the United States marshal?
Mr. SOBELOFF. Well, the United States marshal, but there was no debate on that, there was no argument before the Court there about the calling out of the militia or anything of that sort, that was not in the scope of the argument.
Senator O'MAHONEY. Well, the reason for asking my question
Mr. SOBELOFF. I hope that will never come and I do not expect it will ever come. I think that fundamentally this Nation is law-abiding and respects the Court, even though it disagrees with particular decisions, and that this Nation will not defy the Court.
I think, on the other hand, the Court realizes and has shown already that it realizes the complexity of this problem and the great human issues involved on both side, and that it also has acted and will continue to act with moderation and judgment and consideration, and that these difficulties-which I do not mean to minimize-will be resolved without violence and without disorder.
Senator ERVIN. I would like to state that I did not mean to imply by my questions that the courts had any power over the military forces of the Nation.
Senator O'MAHONEY. Well, it is a question of misunderstanding, of course
Senator ERVIN. The question was whether the Court had the power to devise rules and regulations, which are in effect legislation, to enforce its decree.
I want to express my appreciation for the opportunity the chairman has given me.
Senator O'MAHONEY. Any other questions?
Senator ERVIN. I have no other questions.
Senator O'MAHONEY. That being the case, we will now proceed to the insertion in the record of some documents which have come to me as chairman of this subcommittee.
One of these is a letter dated May 15, 1956. It comes from Mr. Charles Shankroff, post office box 1003, Baltimore, Md., and it purports to be an analysis of both the transcript of the hearing of this case on May 5, and of certain records with respect to the Baltimore Trust Co. to be found in the appropriate courts of Baltimore, Md.
It deals with the testimony of Mr. Hospelhorn and it is six and a half pages long and it brings charges of conflict of interest against
This document was placed in the Congressional Record of last Thursday by the Senator from South Carolina, Mr. Johnston. It is now made, with its attachment, which is a copy of a petition filed by Mr. Hospelhorn in Circuit Court 2 of Baltimore, Md., we will make that a part of our record, and I understand that copies of this have been distributed to all members of the committee and, as I say, it has been published in the Record.
(The documents referred to are as follows:)
Hon. JOSEPH C. O'MAHONEY,
Senate Committee on the Judiciary,
BALTIMORE, MD., May 15, 1956.
Senate Office Building, Washington, D. C.
DEAR SENATOR: I avail myself of the opportunity you twice extended to me Saturday, May 5, 1956, to give the subcommittee, of which you are chairman, a statement containing my objections to the confirmation of the nomination of Simon E. Sobeloff as judge of the Fourth Circuit Court of Appeals of the United States.
I ask that my statement be inserted in and made a part of the official transcript of the record of your hearings. I am furnishing copies hereof to the other members of the Judiciary Committee.
I want you and the committee to understand at the very outset that I have no personal grievance against Mr. Sobeloff. I never saw him until I appeared be
fore the committee. I have not suffered from his wrongdoings. My sole concern is as a civic matter and in the public interest. I speak entirely from the records as I have studied them. My entire concern is based upon my hope and belief that our judges should not only be men above every reproach but even above the suspicion of wrongdoing. I am sure this concept of mine is not too high and is fully shared by the committee.
I also wish to correct some of the errors in the transcript. I wish to straighten out some of the impressions that may be created by the testimony of Mr. Sobeloff and others. I wish your record to be an honest statement of the pertinent facts. I do not wish the committee to reach a conclusion upon tangent, incomplete, or twisted assertions of fact. Such a result would be unfortunate indeed.
(a) Mr. Hospelhorn (deputy bank examiner) stated his records (receiver's) were destroyed under a court order and were therefore not available. That is true to the extent it goes, but he should have said their destruction was ordered on condition that the records be microfilmed. So the records are not in fact destroyed. They are available. None of the court records have been destroyed. Your subcommittee is entitled by subpena and can see the pertinent portions of both sets of records.
(b) First of all, relating to myself, I am an experienced real-estate operator. I am experienced in researching court records and documents. I have devoted well over a year in a study of the Baltimore Trust Co. case. It is case No. 20433a, docket 44a of 1935, now pending in circuit court No. 2, Baltimore, Md. The subcommittee can obtain, by subpena, the proof of every statement of fact that I am about to make concerning this and other cases.
(c) I am 74, not 72, years old.
(d) There were 15 court actions against the officers and directors of the Baltimore Trust Co.-9 in circuit court No. 2 of Baltimore City and 6 in the city court of Baltimore. They involved in the aggregate over $56 million, not $150 million, as I am reported to have said. These actions were settled by Mr. Sobeloff and his associates, who represented the receivers, for the small sum of $205,500. Sobeloff and his associates permitted the costs of these suits to be paid out of the assets of the receiver (the plaintiff). In the varying types of these 15 legal actions, the defendants were financially responsible and had the ability to respond in a much larger amount than the small settlement of $205,500. Judge Soper praised Mr. Sobeloff for his report on the liability of the officers and directors. I condemn Mr. Sobeloff for his neglect in the execution of his report and the small settlement he agreed upon.
I agree with Judge Soper that Mr. Sobeloff made a good report. Where I disagree, and Judge Soper remains ominously silent, is that Mr. Sobeloff did not pursue his good report and assist in forcing a full compliance therewith to the extent of the financial ability of those charged with the duty, responsibility, and financial liability to the depositors and creditors of the bank. The subcommittee should subpena Mr. Sobeloff's reports (three) from the clerk of court (circuit court No. 2, Baltimore, Md.). They are available. They go into the questions
of fixed criminal and civil liability, the bank's building, etc., in detail. Mr. Sobeloff should not be confirmed by the Senate of the United States for the following, among other, reasons:
Having reported as an officer of the court on the statutory liability of the officers and directors of the Baltimore Trust Co. that their monetary liabilities to the receiver aggregated in excess of $56 million, he (Sobeloff) was derelict in permitting 15 suits (6 in Baltimore city court and 9 in circuit court No. 2 of Baltimore City) to be settled by the payment by only 17 of the 19 defendants of the small sum of $205,500, while the financial responsibility and ability to pay more by the defendants was much greater. The effect of the small settlement was obviously detrimental to the rights of the receiver and those creditors represented by him. Two of the defendants paid nothing, though each (P. L. Goldsborough and Donald Symington) was reputed to be of large financial means. careful examination of only 1 of the 15 cases will substantiate this charge. The other cases, if and when examined, will aggravate the charge and at the same time compound and multiply the indisputable proof of it.
In case No. 21647, in docket 45, at page 391, commenced August 6, 1936, in Circuit Court No. 2 of Baltimore City, Md., and entitled "Hospelhorn, Receiver (Sobeloff being one of his attorneys of record), versus Wm. A. Dixon, A. E. Duncan, Albert D. Hutzler, Wm. B. Matthai, Safe Deposit and Trust Company, and Frank Newcomer, Executors, etc., I. Manning Parsons, Donald Symington, Henry E. Treide, and Herbert A. Wagner," a sworn complaint was filed for damages aggregating $20,206,014.79 for losses by reason of the negligence and inattention to duties by the defendants (former officers and directors). Mr.
Sobeloff's fine reports charged acts of criminal and civil negligence. There were 42 accounts or items involving negligence in this 1 case alone. The court still has this record in its files as well as the records in the other 14 cases. The quaere is Why should Mr. Sobeloff have made the excellent report (Judge Soper's testimony) of the criminal and civil negligence on the part of the officers and directors in the first instance (1936) and their legal liabilities thereon, and then permit, as attorney of record for the receiver, the officers and directors to escape a $56 million liability (1937) by the payment of only $205,500? I suggest the propriety of a careful analysis of each of the 15 cases. the sunlight in on this conflict and obvious dereliction or contradiction of duties. It may be said that this settlement was approved by the court. Well, if that be true, why didn't Sobeloff appeal on behalf of the receiver? Or was it then, in 1937, to Sobeloff's greater personal interest to protect those being pursued by the receiver at the original instance of Mr. Sobeloff in his reports? The committee in pursuit of the truth may develop the correct answer.
I submit that the records in the case show that Mr. Sobeloff received $30,000 from the receiver for his reports and later the sum of $7,500 for the services in the 15 lawsuits he permitted to be settled for the trifling sum of $205,500, excusing as he did all liability on the part of financially able defendants Goldsborough and Symington. Your record should show what other amounts he may have received for resisting stockholder's liabilities, the questionable sale of the building and the other assets of the Baltimore Trust Co.
If Mr. Sobeloff was right in his reports that the officers and directors were guilty of criminal and civil negligence wherein sworn losses in excess of $56 million were suffered by the creditors, how can he be right in settling those losses against financially responsible defendants for the negligible sum of $205,500? In which case was he right?
In an early suit by a stockholder, Mr. Sobeloff sought the court of appeals (Maryland) ruling on the statutory stock liability of a stockholder and it was determined in that decision that a liability of $10 per share was proper. Why did he permit, without appeal, Judge O'Dunne to settle the stockholders' liability later at only $5 per share? Whose interest did he represent? Did he represent the resisting and contesting stockholders or did he represent the best interests of the estate of the receiver? Did he at various times get compensation from both sides of this issue? Did the receiver not lose over $1 million in losses from inadequate assessments by Sobeloff representing conflicting interests at the time of the settlement?
A copy of 1 of these 15 suits is attached hereto for the information of the committee.
The foregoing suits for criminal and civil negligence whose damages are laid in an amount in excess of $56 million are not the ordinary types of negligence suits where the amount claimed are flexible or elastic and dependent upon the arrival of a judgment by men of varying opinions. The amount of $56 million was mathematically determined in the excellent report of the fixed dollar liability by Mr. Sobeloff. How now can he justify or how could he then justify