Cedar Rapids National Bank v. American Surety Co. of New York, 35107

CourtUnited States State Supreme Court of Iowa
Writing for the CourtEVANS, J.
Citation195 N.W. 253,197 Iowa 878
Docket Number35107
Decision Date19 October 1923

195 N.W. 253

197 Iowa 878



No. 35107

Supreme Court of Iowa, Des Moines

October 19, 1923


Appeal from Linn District Court.--F. L. ANDERSON, Judge.

ACTION upon a policy of insurance, whereby the defendant insured the plaintiff bank against loss by theft. Plaintiff sustained a loss of $ 6,200. The disputed question is whether it was a loss by theft. At the close of the evidence, there was a directed verdict for the plaintiff. The defendant appeals.


C. E. Richmann and Grimm, Wheeler & Elliott, for appellant.

Barnes, Chamberlain, Hanzlik & Thompson, for appellee.

EVANS, J. ARTHUR and DE GRAFF, JJ., concur. STEVENS, J., concurs in result. PRESTON, C. J., and WEAVER, J., dissent. FAVILLE, J., takes no part.



The plaintiff carried a policy of insurance issued by the defendant, whereby the plaintiff was insured against losses from various causes. The only provision of the policy necessary to be set forth for the purpose of this case is the following:

"(B) Through robbery, burglary, theft, holdup, destruction, or misplacement, while the property is within any of the [197 Iowa 879] insured's offices covered hereunder, whether effected with or without violence, or with or without negligence on the part of any of the employees."


"(E) This bond does not cover any loss caused from an overpayment by a teller to a customer."

For the purpose of our consideration of the questions presented, we adopt the statement of facts contained in the brief of appellee, as follows:

"The appellee, Cedar Rapids National Bank, is a national banking corporation, with its principal place of business in the city of Cedar Rapids, Linn County, Iowa, engaged in the banking business in that city. The appellant, American Surety Company of New York, is a corporation organized under the laws of the state of New York. On the 10th day of December, 1912, the appellant issued to the appellee a certain bond, known as a banker's blanket bond, whereby it undertook to indemnify the said appellee against certain losses occurring in its banking house in said city of Cedar Rapids, Iowa, to wit: 'robbery, burglary, theft, holdup, destruction, or misplacement.' On the 20th day of January, 1921, a person calling himself Chas. E. Boyer called at the plaintiff's bank, stating that he desired to open an account. He conferred with the vice president, Martin Newcomer, and stated that he [195 N.W. 254] was a traveling salesman, who had just moved to the city, and that he had taken an apartment in the Brown Apartments. He deposited, on this occasion, the sum of $ 6,875 in currency. There were three paying tellers and four teller's cages along the northerly end of the bank, the bank room being about 120 feet long. On the following day, January 21st, Boyer personally cashed two checks, one for $ 300, in the morning, and later on said date, one for $ 375. The cage occupied by Julius Richter was the westerly cage. On Saturday, the 22d day of January, 1921, about 11:30 A. M., a rush hour, while the bank was crowded with customers, said Boyer came to the cage of the teller Julius Richter, and presented a check payable 'to cash,' in the amount of $ 6,200. Richter, not knowing the state of Boyer's account, went to the bookkeeper and ascertained that he had sufficient funds in the bank to cover said check, and therefore paid to Boyer the sum of $ 6,200 in currency. While [197 Iowa 880] he was paying out the money to him a telephone message came to the bank, stating that Richter was wanted at once at St. Luke's hospital, on account of a serious accident which had happened to his family. The telephone operator receiving the message, failing to get Richter by telephone, sent one of the bookkeepers to notify him. Richter, having paid Boyer the money, receiving this urgent, terrifying message, immediately locked his cage, leaving the paid check therein, and left hastily for the hospital, without notifying anyone that he had cashed the check. The bank closed at 12:30 on Saturdays. Immediately after Richter left, Boyer presented a second check for $ 6,200 to the teller Leinbaugh, in the easterly cage, who took it to the vice president, Newcomer, to verify the signature. Newcomer knew nothing of the previous check cashed by Richter, so inquired of the bookkeeper, Mrs. Grace M. Collingwood, the same one previously consulted by Richter, as to whether or not the deposit was in currency or checks. She informed him that the deposit was in currency, and he told the teller Leinbaugh the check was all right. Thereupon, the teller Leinbaugh paid the second check for $ 6,200 to Boyer, who immediately decamped with the money thus secured. The bookkeeper, Mrs. Collingwood, testified that she saw Richter hastily leave the bank, and heard one of the girls say, in the bank, that some of his family had been hurt, and that he had been called to the hospital. When Newcomer made inquiry in reference to the check, which was within a minute or two after Richter had spoken to her about it, she assumed that it was in reference to the first check for the same amount, and that the departed teller had turned it over to the other teller, Leinbaugh, to take care of for him, on account of the supposed accident. The bank did not discover, until Richter returned to the bank, that both checks had been paid. They immediately informed the police, and every effort was made to apprehend Boyer, but he made good his escape. They learned, upon inquiry, that he had never had an apartment in the Brown Apartment, and no trace of him was found. The telephone operator who received the message at the bank testified she was familiar with the voice of the customers of the bank, and that the voice of the person calling in with the message for Richter was strange to her; that the person appeared greatly [197 Iowa 881] excited, and fairly shrieked into the phone, and conveyed the impression of great urgency, and then immediately rung off. The whole transaction was a trick, to secure possession of the $ 6,200, for the purpose of stealing the same. The plaintiff, as a part of his main case, offered to show that Boyer, under the name of R. L. Norris, attempted this same trick upon the Fourth National Bank at Atlanta, Georgia; that he was apprehended in the act of doing the same; but that he made his escape from the officers by jumping out of a lawyer's window, whom he had been permitted to consult, and has never been heard of since. The testimony concerning the Atlanta attempt was excluded by the court, upon objection by the defendant. The whole transaction took place in about two minutes, when the bank was crowded with customers, at a rush hour; and all the facts unmistakably show that it was a scheme boldly planned and skillfully executed to secure possession of the bank's money with the intention of stealing it and carrying it away. It was the well known crime of larceny by trick, which has been the subject of many decisions."

We deem the evidence quite conclusive, and appellant does not contend otherwise, that Boyer acted with fraudulent intent, and with criminal purpose to possess himself of the money of the plaintiff to which he was not entitled. In order to recover, it was incumbent upon the plaintiff to show that Boyer, the wrongdoer, was guilty of theft by reason of the means adopted by him to obtain the money. The contention for the defendant is that he was guilty of obtaining money by false pretenses, and that he was not guilty of theft. This is the disputed question presented.

Theft is the equivalent of larceny. It is denominated by the latter term in our criminal statutes. Our statutes also define the crime of obtaining property by false pretenses. These are separate and distinct offenses. When the larceny is accomplished by a trick, they approach each other in close similarity. Even then a well defined distinction is maintained. The latter offense is defined by Section 5041 of the Code, which is a part of the chapter on "Cheating by False Pretenses."

Under our previous holdings, if the wrongdoer by false pretense or trick induce the injured party to surrender to him the [197 Iowa 882] possession of the property, without any intent on the part of the injured party to pass the title of such property to the wrongdoer, and if the wrongdoer so obtain possession of the property with intent to appropriate the same to his own use, then the crime thus committed is a larceny by trick. In such a case, the fraudulent inducement is deemed the equivalent of a trespass and of a felonious taking, which is an essential element of the crime of larceny. On the other hand, if the wrongdoer fraudulently induce the injured party to surrender to him, [195 N.W. 255] not simply the temporary possession of the property, but the absolute title to and possession of the property, then his offense is that of obtaining property by false pretense, and not that of larceny. To put it in another way, if the owner of the property be induced by a fraudulent trick to loan it to the wrongdoer for temporary use and return, and if the wrongdoer so borrow the same with intent to appropriate to his own use, and does so appropriate, the offense is larceny. On the other hand, if the owner be thus fraudulently induced to sell or trade his property and to part with it absolutely to the wrongdoer, the offense is that of obtaining property by false pretense. In State v. Loser, 132 Iowa 419, 427, 104 N.W. 337, we said:

"But in view of the allegations of the indictment and the charge as given by the court, it was important that the crimes of larceny and of cheating by false pretenses be clearly distinguished. That there is a distinction between the two is apparent, although they are in some respects similar in character. The distinction is this: If the false...

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