Chapter XXII · Higher Courts Free Schmitz and Ruef.

On January 8, 1908, the municipal officials elected with Mayor Taylor assumed the duties of their office. That day, Ruef was taken from the custody of the elisor and locked up in the county jail. In the jail with him were Schmitz, convicted of the extortion charge to which Ruef had pleaded guilty, and Glass, who had been convicted of bribery.

The following day, January 9, the Appellate Court, for the First District, handed down a decision in the Schmitz extortion case, which, later sustained by the Supreme Court, unlocked the prison doors not only for Schmitz, but for Ruef also.[341]

The decision was the first serious setback in the graft cases that District Attorney Langdon’s office had received.

The prosecution had prevented Ruef seizing the District Attorney’s office; had defeated the efforts of the defense to have the indicting Grand Jury declared an invalid body; had overcome the resistance of the defendants to facing trial jurors; had, after meeting the clever opposition of the best legal talent obtainable for money, forced trials before juries and secured convictions; and finally, the prosecution had met the defense before the larger jury of The People, and, at the polls, had won again. But, with a stroke of the pen, the Appellate Court swept aside the greater part of the accomplishment of fifteen-months struggle against corruption. The court found the indictment under which Schmitz had been convicted of extortion to be insufficient and ordered the defendant to be discharged as to the indictment.

In as much as Ruef, Schmitz’s co-defendant, indicted jointly with him for extortion, had plead guilty to the same indictment as that under which Schmitz had been convicted, the effect of the decision was to free Ruef as well as Schmitz.

Before passing upon the sufficiency of the indictment, the court took occasion to deal with the points of error as raised by the defense. On five principal points the court found that error had been committed.[342] On this showing, the case could have been sent back to the Superior Court for re-trial. In that event, Ruef’s status would not have been affected. But the court went back of the trial to the indictment, on points raised in the defendant’s demurrer, found for the defendant, and held the indictment to be insufficient.

In the discussion of the decision which followed, criticism was confined almost exclusively to the court’s rulings on the sufficiency of the indictment. The point raised was that the indictment did not state facts sufficient to show that any public offense had been committed.

The court held in effect that the facts presented did not, under the definitions of the California codes, constitute the crime of extortion.

In the California Penal Code[343] extortion is defined as “the obtaining of property from another, with his consent, induced by a wrongful use of force, or fear or under color of official right.” The section following[344] defines “Fear such as will constitute extortion may be induced by a threat either: (1) to do an unlawful injury to the person or property of the individual threatened, or to any relative of his, or member of his family.”

The court found that the threat which induced the fear in the Schmitz-Ruef extortion cases, was a threat to prevent the parties from obtaining a liquor license, and thus to prevent them from carrying on the business of selling wines and liquors at retail. A license to sell liquor, the court showed, is not property in the ordinary sense of the word,[345] but a mere permission, and the license is but the evidence that the permission has been given by the proper authorities. “There is grave doubt,”[346] the court held, “as to whether a threat to prevent a party from obtaining a permission or license by one who has no authority in the premises, is a threat to injure property within the meaning of the sections quoted.”

But the court found it unnecessary to decide this question, for the reason it held the indictment insufficient “because it does not allege nor show that the specific injury threatened was an unlawful injury.”[347]

To the man on the street, the reading of the opinion conveyed the impression at least, that according to the Appellate Court, when Schmitz had shown his power to prevent the French Restaurants getting their licenses, thus endangering investments valued as high as $400,000, and Ruef because of the fear engendered by this showing, acting with Schmitz, had secured large sums of money from the enterprises thus threatened, the crime of extortion had not been committed.

The decision was received with protest[348] and denunciation. The Call dubbed it “bad law, bad logic and bad morals.” “Any ordinary intelligence,” said The Examiner, “would construe the threat to take away a license to sell liquor from a restaurant unless a certain sum of money was paid as the plainest kind of extortion.”

“When,” said Dr. William Rader of Calvary Presbyterian church, in a sermon preached on the evening of the Sunday after the decision was made public, January 12, 1908, “extortion is not a crime, when bribery is not even a wrong, when a confessed felon can learn that he is really righteous, and that his trial, confession and conviction have all been nothing but a mistake—a slight mistake—I repeat that however correct this may be legally and ethically, it has the effect of making us stand amazed at the rapid revolutions of the legal wheels. Perhaps tomorrow we shall learn that this last decision has been a mistake, too. I hope so; I believe so.”

“We of this city,” said Rev. Dr. Evans at Grace Episcopal Cathedral, “are dumbfounded by a judicial pronouncement which enables the high officials of our city to rob and plunder without any technical breaking of the law. It is enough—such an audacious mockery of the first principles of common sense—to justify the appointment of a lunacy commission to inquire into the sanity of men who could formulate such a judgment and it ought to provoke an explosion of righteous indignation from one end of the State to the other. We need not hesitate to declare that such an opinion as this has its inspiration in that place where public sentiment without a single dissenting note would give it its unanimous approval.”

The decision did not immediately release Ruef and Schmitz. The prosecution had still an appeal to the Supreme Court for a re-hearing and, pending such an appeal, the defendants remained behind the bars. This delay annoyed those interested in seeing the graft defendants go free. Stories were circulated that the prosecution would not appeal. But the prosecution did appeal. Three months later, the Supreme Court rendered its decision.[349]

The decision was against the prosecution.

“The (Supreme) court is unanimous in the opinion,” the decision read, “that the District Court of Appeal was correct in its conclusion that the indictment was insufficient, in that it did not show that the specific injury to the property of the restaurant-keepers threatened by the defendant was an ‘unlawful injury.’”

The Supreme Court went a step further than the Appellate Court had done and attacked the indictment on the ground that it had not set forth that Schmitz was Mayor at the time of the alleged extortion, nor that Ruef was a political boss practically in control of the municipal government.

The prosecution in its application for a rehearing had set forth that “it will be found and decided by this court that levying blackmail upon licensed businesses by the Mayor and the political boss of a metropolitan community is a crime under the law of California and should not go unwhipped of justice.”

This observation was denounced in the Supreme Court’s decision as “a gross misstatement of the case and of the question to be decided as presented by the indictment.”

“We again emphasize the fact,” reads the opinion, “that the indictment does not aver that Schmitz was Mayor, or that Ruef was a political boss, or that either of them had any power, or influence, or control over the Police Commissioners, or that they threatened to use such power, influence or control in preventing the issuance of a license.”

The storm of protest with which this opinion was received was even greater than that which followed the Appellate Court decision. Once more did press, pulpit and public, from one end of the State to the other, join in expression of indignation.

The court in return insisted that it was misrepresented and misunderstood. Chief Justice W. H. Beatty essayed the task of writing an explanation of the ruling, that “the man on the street” might understand.

The Chief Justice’s article appeared in the Sacramento Bee of April 29, 1908.[350] Again was the omission from the indictment of the fact that Schmitz was Mayor and Ruef a boss, emphasized.[351] And again, it may be added, did the stupid man on the street fail to understand. In fact, disapproval of the decision continued. Heney attacked it respectfully in tone, but with sharp criticism.[352]

James M. Kerr,[353] in his Cyclopedia Penal Code of California, published in 1908, declared in effect that in the Schmitz decision the Supreme Court of California formulated bad law and advocated bad pleading.

As for Ruef’s position as a political boss, Kerr contended, it was merely a matter of evidence, and not a matter to be pleaded. “The Supreme Court,” concludes the law writer, “seems to lose sight of the fact that the crime of extortion in this State is not confined to persons in office and exercising official influence.”

Dean John H. Wigmore of the Northwestern University School of Law, and author of the standard work, Wigmore on Evidence, in a crushing criticism of the decision and the various documents in the case, charged the Chief Justice with being “plainly inconsistent.”

“The truth is,” said Dean Wigmore, “that the learned Chief Justice in endeavoring to support his decision weaves a logical web and then entangles himself in it.”[354] The moral of the Schmitz decision is, Dean Wigmore concludes, “that our profession must be educated out of such vicious habits of thought.”

The extravagance of the criticism of the decision was more than equaled by the claims made by the opposition to the prosecution, of its effect upon the status of Schmitz and Ruef.

“Schmitz,” said a writer in The Chronicle, “is now thoroughly exonerated of the charge of having squeezed money from Malfanti, the French-restaurant man.”

However this may have been, the practical result of the decision was that both Schmitz and Ruef, with no convictions against them, by furnishing bonds in the bribery cases, were able to walk out of prison.

Schmitz did not return as a prisoner. Ruef enjoyed his liberty until November, 1908.