State v. Menke

APPLICATION FOR REHEARING

BY THE COURT:

The above entitled cause is now being determined on defendant-appellant’s application for rehearing. The grounds are set forth under five separately stated and numbered assignments. Accompanying the application is a thirteen page brief together with a three page addendum.

In our original opinion we called attention to the case of State v Baxter, 89 Oh St 269, and made detailed reference to similarity -of language of the Code sections under which the indictment was drawn in the Baxter case and the instant case. We made comment to the effect that counsel for appellant had failed to present argument distinguishing the Baxter case from the instant case. The present application for rehearing takes up this challenge and meets our suggestion with a statement that there is as much difference in the two cases as between day and night.

This is a very broad statement but it fails satisfactorily to answer the observations we made in our original opinion. Counsel in their argument make the observation that Baxter’s guilt was obvious under the uncontradicted facts.

The trial court thought otherwise and apparently on a kindred theory to that advanced by counsel in the instant case.

In discussing this question in the application for rehearing, counsel again refer to the provisions of §12873 GC and argue that it is an interpreting section controlling §12876 GC.

We ajre unable to follow this theory. The two sections are independent and while a state of facts might exist which would warrant an indictment under either section, nevertheless the state would be bound by the section selected under its allegation of claimed criminal conduct. The indictment in the Baxter case received no support from §12873 GC, for the reason that 1;he complaint was brought under §12876 GC.

The Supreme Court so recognized the indictment and made no reference to §12873 GC. It is quite true that other sections of the code prescribing duties of public officials in the handling of public funds would necessarily be considered in an indictment under §12876 GC.

*94Likewise sections of the code making provision as to how administrators and executors and other fiduciaries should handle funds coming- into their hands would be invoked in considering §12467 GC under which the indictment was returned in the instant case. Counsel for appellant on page 2 of their brief make reference to certain observations made by Judge Wilkin in- the Baxter case as found on page 281 of the opinion. . We think a reading of the entire paragraph discloses that the Judge writing the opinion was making reference to a situation entirely different and distinct from the instant case.

We find nothing in counsel's argument under their first proposition which was not considered by «us in our original opinion.

While we were considering appellant’s application for rehearing and before the opinion was released,' we 1 received advice from the original counsel for appellant that Mr. Luther Day and Mr. Earl W. LeFever of Cleveland, Ohio, had been retained by the defendant and requested the opportunity to file further brief on the application for rehearing.

This request was granted and within due time brief was filed by the Cleveland counsel. In this supplemental brief it is stated that in the interest of brevity it shall be their purpose to avoid as much as possible duplication of arguments and authorities and the supplemental brief is confined to argument on a single proposition,- but counsel say that they adopt the arguments made by former counsel in their briefs. It is sought to bring the instant case within the rule repeatedly decided by the courts of this state, as well as sister states, that mere bookkeeping transactions or improper entries where no money is actually withdrawn cannot be the predicate of an action. These cases are mostly civil actions and we think are readily distinguishable from the instant case. At the top of page 3 of the supplemental brief counsel make the.statement that the milk fund account was set up by 'defendants as an account of the bank and further that they understand that our court so concluded.' • •

Counsel are in error in this observation. In .our original opinion on page 7 we made a very complete statement, of the factual conditions attending the setting up of the milk fund account. The inference arising from these facts can leave no other conclusion than that the milk fundPsfGcount was, in fact, Joseph'Menke. The only act in connection therewith was by Joseph Menke. He and he alone set up the account; nobody else knew anything about it. -He made all deposits therein. He *95issued all checks for the money that was drawn therefrom, sighing the checks “Milk Fund by Joseph Menke”. It is true that he testified that he set up this fund for the bank but everything he did in connection therewith refutes this claim. In the supplemental brief, counsel refer to the case of State ex rel. v Farmers Merchants Bank, 118 Neb. 495 (225 N. W. 669) and quote at length from the court’s decision in this case. Counsel make the statement that of all the cases cited, this is nearest analogous to the instant case. In our judgment the case is not analogous but is very easily distinguished.

In the first place it was a civil action. The ba.nk had been 'closed' for liquidation. A man by the name of Kranberg had formerly been the president and general manager of the bank and he had also been an executor of an estate and, as such, had an executor’s account in the sum of $8000.00 and certificates of deposit on the bank in the sum of $10,000.00.

In the interest of assisting the bank’s statement, Kranberg, the president and general manager, had illegally transferred all the assets held by him as executor to other accounts in the bank. This was wholly a bookkeeping transaction. After the bank was closed a successor executor sought to have the assets restored to the estate. The Supreme Court of. the state of Nebraska so ordered. We fail to see how it could be determined otherwise. This decision does not necessarily determine that Kranberg might not have been guilty of some criminal action but whether he could or not, there' would still be a marked distinction with the instant case. In the Nebraska case the court made the following observation:

“had the funds been actually withdrawn, it would have presented a different problem, but such was not the case. The thing Kranberg did relative to this deposit, he did in performance of banking functions.”

Menke actually did withdraw funds from the Marker estate. What he did was not in the performance of banking functions. His every move was to help the milk company of which he was a stockholder. The very name “Milk Fund” would so argue. His creation of the account known as the milk fund, his 'permitting the dairy company to overdraw its' account as contemporaneous acts, Menke may not escape his responsibility by a showing that the dairy company’s overdraft occurred first. The permitting the dairy company to overdraw its account was his act and was illegal. The dairy *96company at that very time was insolvent, as he must have known. As bearing on the question of intent, we find that this milk fund account was continued for a period of about four and one-half years. The only inference is that it was continued for the purpose of helping the dairy company, an insolvent institution. During this period of time the administrator account was milked to the point that it only had about $65.00 balance. More than $4000.00 was withdrawn from the administrator’s account. We understand that the state’s case was limited' to $1500.00 but the other matters may be considered in the interests of determining intent.

The jury had a right to draw an inference that when Menke authorized the dairy company to have an overdraft, he knew where he could procure the money to take it up. It was a conceived plan to use the Marker estate money to bolster the dairy company’s status. The mere fact that the hank might be liable by reason of the improper acts of its cashier does not meet the question in this criminal prosecution.

The funds of the estate were actually appropriated and withdrawn from the bank. After the estate fund was exhausted, the dairy company folded up, went into liquidation and was found to be hopelessly insolvent. Its Board of Directors had to make up a deficit on their obligations as note endorsers. The defendant, Menke, recognized that the funds had actually been withdrawn from the bank. This is evidenced by the fact that a few months before the return of the indictment against him he negotiated some personal security holdings and paid the net amount into the bank to the credit of the administrator’s account.

The original counsel for the defendant argue that so long as the defendant Menke possessed assets sufficient in amount to take care of any withdrawals from the estate account, that he could not be guilty of embezzlement or the converting of the money in the administrator’s account to his own use. We do not think this is a correct statement of the law and we know of no well considered opinion so holding.

We have not found it necessary to make reference to the numerous cases cited in supplemental brief of counsel for'the ■defendant. Suffice it to say that we have examined each and every one of them. We do not think they apply to-the factual condition existing in the instant case.

The application for rehearing will be overruled.

BARNES,'P. J., HORNBECK and GEIGER, JJ., concur.