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.”