The People v. Goldman

At the July term, 1923, of the criminal court of Cook county the grand jury returned an indictment against plaintiff in error, Jacob Goldman, charging him in three counts with larceny as bailee, embezzlement, and larceny. A motion to quash the indictment was overruled. At the conclusion of the evidence the State's attorney nollied the third count and asked for a conviction under the first count for the wrongful conversion of a $50 Victory bond. At the conclusion of the trial the jury returned a verdict finding plaintiff in error guilty as charged and fixing the value of the property converted at $550. Motions for a new trial and in arrest of judgment were overruled and plaintiff in error was sentenced to the penitentiary.

This prosecution arises out of the conduct of plaintiff in error (hereafter called defendant) as receiver of the estate of a partnership, Kirby, Cullen, Auer Honecker, in a proceeding in the circuit court of Cook county to wind up its business. Defendant was appointed receiver of this estate September 23, 1920, and continued in that capacity until he was removed, May 14, 1923. At the time of his removal he was acting as receiver in 298 cases pending in the courts of Cook county. Between the time of his appointment and that of his removal several orders were entered directing him to collect the assets of the estate, to pay certain claims against the estate and distribute the balance *Page 79 among the four persons constituting the partnership. The proof in the record shows Goldman received and receipted for property of the partnership, two $500 Hamilton Club bonds, ten $100 Victory bonds, one $500 note, one share Refrigerator Car Equipment Company stock, two plate-glass insurance policies, and one lease to room 1304 Standard Trust building.

The first count of the indictment charged defendant with larceny as bailee of $9521 in money, one $500 bond and one $50 bond, the property of the partnership named. The second count described the same property and alleged defendant was appointed receiver of Kirby, Cullen, Auer Honecker, co-partners, and came into possession of assets of the partnership; that he was legally required by the court to account for said funds and property and pay and turn them over to the Chicago Title and Trust Company, his successor as receiver, but refused to do so, whereby he committed larceny.

The first contention of defendant which we will notice is that a receiver is not subject to indictment under section 81 1/2 of the Criminal Code. That section is as follows: "Whoever, being the administrator of the estate of a decedent, or the executor of a last will, or guardian of any minor, conservator of any idiot, distracted person, drunkard, spendthrift or insane person, or trustee or other person acting in any fiduciary capacity, without good cause, fails or refuses, when legally required by the proper person or authority, to account for or pay over to such person or persons as may be lawfully entitled to receive the same, any money, choses in action, or other property which may have come into his hands, by virtue of his office, duty or trust, shall be deemed guilty of larceny."

It will be seen the statute specifically enumerates as liable to indictment and punishment for larceny, any administrator, executor, guardian, conservator, trustee, "or other person *Page 80 acting in any fiduciary capacity." A receiver is not specifically mentioned, and it is argued a receiver is not a trustee and does not act in a fiduciary capacity, and the statute should not be construed to embrace that office. Counsel on both sides say there is very little direct authority to be found on the question. In addition to the general principle that a receiver is an officer of the court, that property in his possession is in custodia legis, that he stands indifferent between the parties having claims against the funds but his duty is to preserve the property and disburse it upon orders of the court, counsel for defendant relies on a decision of the Supreme Court of Kansas in State v. Hubbard, 58 Kan. 797. We do not consider that case decided the question here raised. The court construed a statute making persons occupying certain positions liable for embezzlement and larceny. The statute mentioned trustees and agents but not receivers. A receiver was indicted and convicted, and the conviction was sought to be sustained on the ground that he came under the designation of "agent." The court held a receiver was not an agent and reversed the judgment of conviction. It is apparent some meaning must be given "or other person acting in any fiduciary capacity," in section 81 1/2.

Counsel for the State argue that a guardian or conservator has no title to the property but possession only by virtue of his appointment by the court, and a receiver is of the same character of fiduciary and under the rule of ejusdem generis is embraced in the statute. In People v. Caminetti, 242 U.S. 470, the defendant was indicted and convicted under a statute which forbade transporting a female from one State to another for the purpose of prostitution or debauching or for any other immoral purpose. It was contended on behalf of the defendant that the statute was intended only to apply to commercialized vice, and that as what defendant did was free from any element of commercialism his act was not within the statute, no matter how immoral *Page 81 it may have been. The court held, in effect, that construction would nullify a part of the statute; that it might be more culpable and baser in morals to transport a woman to another State for prostitution for pecuniary gain, but the transportation for the purpose of enjoying sexual relations is an immoral purpose and the statute covered such acts.

The enactment of section 81 1/2 was intended to apply to officers or persons entrusted with the management or the preservation of the property of others. We think of no reason why a receiver should be exempt from its provisions. He is appointed by the court to preserve and account for the property the same as a guardian or conservator. The legislature intended the statute should apply to others than those specifically designated. It is true that body might have mentioned receivers if it was intended the act should apply to them, but the fact that it did not is not conclusive the act was not intended to embrace receivers. Having mentioned similar positions as subject to the act which are generally regarded as fiduciary capacities, the statute, without further enumeration, was made to apply to other persons acting in a fiduciary capacity. Perhaps a receiver is, strictly speaking, not a fiduciary nor a trustee, but it is not uncommon to refer to a receiver as aquasi trustee or a fiduciary. (King v. Goodwin, 130 Ill. 102; 23 R. C. L. sec. 2, p. 8; Ardmore Nat. Bank v. Briggs Co.20 Okla. 427; 4 Pomeroy's Eq. Jur. sec. 1336, p. 2663.) Paraphrasing the language of the Supreme Court of the United States in the Caminetti case, supra, the added words, "or other person acting in any fiduciary capacity," show beyond question the legislature had in view the protection of society against other persons than those specifically enumerated. As receivers are, in the main, of the same general character as those mentioned, under the rule of ejusdem generis the act was intended to and does apply to them.

Both counts describe the same property. The only difference is, the first count charges larceny as bailee, and the *Page 82 second charges larceny by embezzlement. The jury returned a general verdict of guilty in manner and form as charged in the indictment. The same transaction is charged in both counts. If the evidence supported either, it was not error to render judgment and sentence on the verdict. Duffin v. People,107 Ill. 113; Langford v. People, 134 id. 444; Love v. People, 160 id. 501.

Arthur J. Belfry testified as a witness for the State. He is a public accountant and was employed by a surety company to audit the accounts of defendant as receiver. He made an abstract from the original books. He got the files at the Chicago Title and Trust Company. He examined check books, stubs, canceled checks, books and court files. He began the work in May, 1923, and completed it in January, 1924. The witness audited the accounts of defendant in all the 298 estates of which he was receiver. He found defendant was accountable to all the estates in an aggregate of $205,000. Defendant had on hand approximately $40,000. He found the defendant was accountable to the Kirby-Cullen estate for $4441.56. Some of the files and papers he found at the Chicago Title and Trust Company and examined them there. He secured the records impounded by Judge Scanlan and examined them, and from all books, papers and files examined he made an abstract showing the amount the defendant was accountable for to each estate. In some instances he found canceled checks which had not been entered in the books. If a canceled check had no name of an estate on it and there was nothing to show on account of what estate it had been drawn the witness put it aside and did not post it. He gave the defendant credit for disbursements shown by the ledger whether he found canceled checks or not. The total receipts in the Kirby-Cullen estate were $23,170.59, disbursements $18,654.03. Witness charged defendant with the receipts he found in his ledger and gave credit for disbursements on the ledger. He had no record of a payment by check *Page 83 No. 6055 of $1000 to Lurie Fishel. He testified his abstract shows Honecker, one of the partners, had received $2012.51, and Auer, another partner, $4726.39, and that if either or both received more his audit was not correct. At the time witness took the figures for his audit there were a lot of loose sheets floating around the office of the Chicago Title and Trust Company. They were loose and in practically everybody's hands. Whoever wanted to work on them took them. Some one assembled them, but witness did not know whether they all got back in the ledger or not. They were loose probably a month. Witness used them while they were loose. He worked on them about eight months. He said his figures were correct. Some of the 298 estates defendant owed nothing. In some estates he had paid more than he received. Witness gave him no credit for what he had overpaid in those estates. He did not give defendant credit for paying the Chicago Title and Trust Company $75,000. Included in that were a lot of moneys returned from attorneys which had already been credited. He gave the defendant credit for receiver's fees whenever there was a court order for fees. He ignored the payment of attorney's fees because he did not find the canceled checks. Counsel for defendant, on cross-examination, asked Belfry if he gave defendant credit for $75,000 paid the Chicago Title and Trust Company, and witness answered he did not; that there were included in the $75,000 a lot of funds returned from attorneys which had already been credited.

Chester R. Davis, assistant trust officer of the Chicago Title and Trust Company, testified the trust company received a large amount of money from defendant. One check was signed by defendant as receiver and one by him individually. He could not give the amount without looking at the records. As he remembered, it was money of all the receivership cases. The record does not show the *Page 84 amount the Chicago Title and Trust Company received from defendant, and we are unable to guess the amount.

The testimony referred to is the only reference we find in the record to any payment made by defendant to the Chicago Title and Trust Company. As no receipts or canceled checks were offered in evidence to show the amount and it cannot be determined what amount was paid, apparently counsel relies upon his cross-examination of Belfry to prove the amount was $75,000, but obviously that does not prove it. It would have been a simple matter to have made definite proof of the amount and not have left it to uncertainty.

Michael Feinberg, a lawyer, testified he was present at the hearings in court during April and May, 1923. Defendant stated he had at that time a balance in the North Shore Trust and Savings Bank and the Keystone Bank of about $22,000, in the National Bank of Commerce either $21,000 or $22,000, a balance of about $100 in the Central Trust Company, $200 in a New York bank, and except a Cadillac car, a diamond ring and wearing apparel that was all the property he had in the world. He said the money he had in banks was borrowed from various people.

Miss Cecil H. Page testified at great length. She had been employed by defendant as stenographer and secretary until his removal as receiver. Thereafter she was employed by Judge Scanlan. Defendant asked her to make up a statement for Harry J. Lurie, who was one of the attorneys for Cullen. Witness had one of the girls type Exhibit 14 from the books, and defendant took it to Lurie before it was checked up. Exhibit 14 showed receipts in the Kirby-Cullen estate of $23,904.44 and disbursements $28,850.43. Among the disbursements was an item to Auer, one of the partners, of $12,263.39. That credit was incorrect and was so admitted by defendant. It should have been $1226.39.

Harry J. Lurie testified he was attorney for the Kirby-Cullen partnership and called up defendant by telephone and *Page 85 requested a statement of receipts and disbursements. Defendant said he would have his young lady make it up and send it to Lurie. Some time afterwards he found the statement on his desk. He called defendant up and told him of the item of $12,263.39 credited as paid to Auer. Defendant said it was a typographical error made by the girl; that he had not paid Auer that amount. The correct sum paid Auer was $1226.39.

Miss Page for the State testified the greater part of the writing in defendant's ledger was done by defendant's former secretary. Some of it was by the witness. The ledger was a loose-leaf book of 600 pages, and contained receipts and disbursements in the various cases in which defendant was receiver. She began work for defendant in June, 1921, and knew nothing about the entries before that time. The books had not been posted to date when she began work. She posted from the check book and from what defendant told her. At the time she quit working for defendant, April 26, 1923, she was a month behind in posting books. The check stubs showed a number of checks not posted, and that was true in a number of the estates. After the Chicago Title and Trust Company took possession she did not work on the books. The books and papers were removed from defendant's office by four men May 15, 1923. She testified she told Judge Scanlan the Chicago Title and Trust Company was making an effort to prevent defendant from making a full and true report, because he was not permitted access to the books and papers. All the posting in the Kirby-Cullen estate was complete, so far as witness knew, when the books were taken possession of by the court. Defendant would not allow witness to get the canceled checks; that he would get them when he wanted them. He made disbursements from a check book which he carried in his pocket and often took blank checks out of the check book kept in the office. At one time defendant told witness to "slice" the books, — to cut out items of receipts. She would *Page 86 take out a page and put a new one in place of it. Disbursements were made to lawyers by checks, which defendant did not permit to go on the books. There were some records burned by defendant at the beginning of the investigation. Defendant told witness he would not have employed her if she had been a good book-keeper. Defendant said in his office to Dahl, one of the lawyers he had paid fees not credited on the books, he would need somewhere in the neighborhood of $100,000. All the receipts in the Kirby-Cullen estate which witness knew anything about were in the books. She did not know whether all money paid out was in the books.

Honecker, one of the partners in the Kirby-Cullen partnership, testified he was paid $500 more by defendant than was shown by Belfry's audit. Auer, another partner, was paid $500 more than was shown by the audit made by Belfry. Defendant also paid to Lurie Fishel, attorneys, $1000 by check No. 6055, which defendant was not given credit for in the audit.

We have endeavored to refer to enough of the testimony to show that defendant kept his books and accounts in such an incorrect and confused manner that neither he nor an expert accountant could make an accurate statement of them. The books, papers and files from which the audit was made had been taken to different places, where they were examined or secured by the auditor for examination. In one instance defendant was charged on his books with a large amount more than he received. The audit showed defendant was accountable in the 298 receivership estates for approximately $200,000. There is evidence that he said he was accountable for $100,000. He had on deposit approximately $40,000, which the proof shows he said, together with a Cadillac car, a diamond ring and wearing apparel, was all the property he owned. He also admitted the money he had on deposit, or most of it, was borrowed. He maintained an account with the National Produce Bank, *Page 87 in which Miss Page testified he kept the funds of all, or substantially all, the receiverships. The condition of defendant's books, his instructions to his secretary as to what she should and what she should not do in keeping the books and accounts, create the irresistible conclusion that there must have been a purpose and intent in defendant's mind to use the funds and so confuse his accounts that it would be difficult to determine with accuracy how much he was accountable for in any particular estate. The court permitted testimony of the audit of the accounts in all of the receiverships and of the amount he was accountable for in each of them in which he had not disbursed all the receipts as shown by the books. In several of them the audit showed no balance due from defendant, but in many of them balances due were shown, aggregating, as we have said, $205,000. In the Kirby-Cullen estate the audit showed defendant accountable for $4441.56. That is incorrect, as the proof showed disbursements of $2000 which defendant was not credited with by the auditor. That would reduce the amount defendant was accountable for in that estate to $2441.56.

Defendant insists the court erred in permitting proof of the state of the accounts in all the receivership cases and contends the testimony should have been limited to the Kirby-Cullen estate. The indictment charged money and property embezzled and stolen was the property of the Kirby-Cullen partnership. It is well understood that proof of the commission of other crimes in no way connected with the one charged in the indictment is not competent, because it does not tend to prove guilt of the defendant of the crime charged. The court, in admitting the evidence, said that the assets were intermingled in one account, and he admitted the evidence for the purpose of determining whether defendant had sufficient funds to enable him to account. Under the peculiar circumstances of this case we are of opinion the court did not err in admitting the evidence. The defendant *Page 88 proved he had in banks, as assets of his receiverships, $40,000. The evidence showed he was accountable for a much larger amount. If, then, the evidence showed he was accountable to the Kirby-Cullen estate for $2000 and nothing was shown as to his liability to any of the other estates in which he was acting as receiver, proof of assets of $40,000 would show he had much more than enough to settle his account with the estate. If the proof shows the defendant accountable to a great many estates, amounting in the aggregate to $200,000, but that in no one of the estates is he accountable for more than $5000, if he were called upon to account and pay over in all of them, as he was, he could not do so with a $40,000 bank deposit. If the testimony had been entirely limited to defendant's account in the Kirby-Cullen estate and showed receipts of $2000 more than disbursements the balance would be less than the assets in the bank, but if called to account, as defendant was, in all of them, the assets in the bank would be wholly insufficient. If he were called to account in each one of the cases he could not do so by exhibiting the same cashier's check or bank deposit in each case when the aggregate amount he was liable for was five times more than the cashier's check or bank deposit. Defendant was not found guilty of larceny of the assets of anyone except the Kirby-Cullen partnership. It would have been difficult, if not impossible, to prove that charge without proving the state of defendant's account in the other cases, and it does not appear to us defendant's rights were prejudiced by the testimony.

We cannot certainly know what items made up the $550 which the jury found was not accounted for by defendant. His counsel argues the $50 Victory bond could not have been part of it because the proof fails to show defendant received it as part of the Kirby-Cullen assets. It was not included in the assets receipted for by defendant. The proof on that question was in substance as follows: *Page 89

Jacob Auer, a member of the Kirby-Cullen partnership, testified they received from a debtor, shortly before the defendant was appointed receiver, a $50 Victory bond No. H-8423235, and witness made an entry of its receipt on the partnership books. State's Exhibit 9 contains the list of property of the partnership receipted for by defendant when appointed receiver. It does not mention the $50 bond.

William H. Cullen, one of the former partners, testified they owned a $50 Victory bond No. H-8423235, but he did not remember whether it was turned over to defendant.

Charles A. Koepke, president of the Keystone Bank, testified that April 9, 1923, defendant gave his note for $1800 for money borrowed from the bank and put up as collateral the bond No. H-8423235, together with other securities. The note was paid by the sale of the collateral. The witness testified that he remembered a conversation with defendant after the bond was sold, in which he said he wanted to take up the $50 bond but had been thrown in jail before he could do so, and when he got out the bond had been sold.

A court reporter who took the testimony of defendant in an examination of him in Judge Scanlan's court in an investigation of the receivership before the indictment was returned, testified defendant stated he remembered having in his possession a Victory bond and that he put it up as collateral with the Keystone Bank. He did not know where it came from. He was asked if he received it from the Kirby-Cullen estate, and replied, "I don't think that is a Kirby-Cullen bond." He was told the Kirby-Cullen records show a Victory bond of the same number as the bond put up as collateral with the Keystone Bank, and replied, "That was the one that was mislaid." He admitted he put the bond, together with others, up with the bank to secure a loan to him.

Joseph Schwartz, a member of the firm of Allen, Ward, Meyer Schwartz, lawyers, testified he loaned defendant $500 April 18, 1923, and took his note for that amount. *Page 90 When defendant first asked for the loan witness told him he would take it up with Ward, as Allen was in Europe. In the afternoon of the same day defendant went to witness' office and said he had to have the money that day; that Allen had said he could have it before he left. Defendant took a $500 bond out of his pocket and said witness could hold the bond until he talked with Ward, and if it was all right with him witness could return the bond. The $500 note was then signed and witness gave defendant a check for that amount. He turned the bond over to a girl in the office and it was filed away. He never saw it afterwards. It was the only Hamilton Club bond, so far as witness knew, in their office.

Ernest H. Allen came back from Europe about May 20. The note had not been paid. Allen testified that after his return he had a talk with defendant about a Hamilton Club bond. He met defendant in Judge Scanlan's court and the bond was mentioned. Witness got it from his office and turned it over to the Chicago Title and Trust Company. He had no other Hamilton Club bond.

Ann Healion, a court reporter, testified she took the testimony of defendant at the time he was being investigated in Judge Scanlan's court in May, 1923. She testified he then stated the two Hamilton Club bonds belonged to the Kirby-Cullen estate and came into his possession as receiver; that the Chicago Title and Trust Company had one of them and the other one he lost; that Allen, Ward, Meyer Schwartz got a $500 bond and the money was deposited in the receiver's account. He said he got a loan upon it for the receivership. He supposed Allen, Ward, Meyer Schwartz had the bond. He put the money borrowed in the bank.

Chester R. Davis, assistant trust officer of the Chicago Title and Trust Company, testified that company received a Hamilton Club bond from Allen and they got another Hamilton Club bond from defendant's office when they took *Page 91 possession of his effects; that the company now has two $500 Hamilton Club bonds. Davis testified it took some time to sort and remove papers and files. Defendant was present the greater part of one day. Some of the files were on the floor, some on tables, some in the wall-safe cabinet, some in the filing cabinet and some in various other places. Everything was in a chaotic condition. They took two van-loads of documents and papers and were about four days at it. After defendant was in jail witness took some records from his office. He was acting under orders of the court. Nothing of value was received from defendant's office except a $500 Hamilton Club bond.

The assets of the Kirby-Cullen partnership receipted for by defendant, in addition to the two $500 Hamilton Club bonds, included ten $100 bonds, a note for $500 and one share of stock. It was not shown what disposition had been made of them or what amount was realized from the assets. Nothing can be traced from the testimony unless it be the $50 bond and the two Hamilton Club bonds.

The proof abundantly warranted the conclusion that defendant made no honest attempt to conserve the assets which came to his hands as receiver. He admitted in the investigation made of his conduct as receiver that he was financially embarrassed; that all the money he had on deposit in banks was borrowed money. He did not testify on the trial, and no proof whatever was offered to explain why, as receiver, he was compelled to borrow money to meet his obligations.

Some complaint is made of giving and refusing instructions, but in our view of the law no reversible error was committed in that regard.

This case is complex and we have not attempted to refer to all the testimony. We have endeavored to fairly refer to the substance of the most important evidence, and upon consideration of the whole record we are of opinion defendant had a fair trial, that no prejudicial error intervened, *Page 92 and that whether his guilt was proved beyond reasonable doubt was a question for the jury. Only when a reviewing court can say, from a consideration of all the testimony, there is a reasonable and well founded doubt of the guilt of the accused is it warranted in reversing a judgment on the ground it is not supported by the evidence. Gainey v. People, 97 Ill. 270;Steffy v. People, 130 id. 98; McCoy v. People, 175 id. 224;Lathrop v. People, 197 id. 169.

We are unable to say the verdict and judgment are not sustained by the evidence, and the judgment is affirmed.

Judgment affirmed.