Grandbouche v. People

Decision Date10 April 1939
Docket Number14361.
Citation104 Colo. 175,89 P.2d 577
CourtColorado Supreme Court

Error to District Court, City and County of Denver; John B O'Rourke, Judge.

A. C Grandbouche was convicted of conspiracies to commit the crimes of false pretenses, confidence game, and cheating and swindling, and he brings error.


William Hedges Robinson, Jr., and Sydney E Shuteran, both of Denver, for plaintiff in error.

Byron G. Rogers, Atty. Gen., and Reid Williams, Asst. Atty. Gen., for the People.

OTTO BOCK, Justice.

The information upon which this case is based contained five counts and charged the plaintiff in error, together with two codefendants, Edna Mae Hewitt and George S. Elstun, with conspiracies to commit the following crimes: (1) Larceny by bailee; (2) false pretenses; (3) embezzlement; (4) confidence game; and (5) cheating and swindling. At the commencement of the trial Hewitt pleaded guilty to the second, third and fifth counts of the information. Plaintiff in error stood mute upon arraignment, whereupon a plea of not guilty was entered for him, and he elected to stand trial jointly with codefendant Elstun, and was found guilty on the second, fourth and fifth counts. Sentences of from six to ten years were imposed, to run concurrently. At the conclusion of the people's case, on motion of the district attorney, the first and third counts were withdrawn. Reference will be made to plaintiff in error Grandbouche herein as defendant, and his codefendants will be designated by their surnames.

In view of the fact that this case was tried over two years ago, we think it appropriate that something be said concerning the delay in the disposition thereof.

The information was filed April 24, 1936. Trial commenced February 23, 1937, and continued for nine days. March 29, 1938, a bill of exceptions was filed in this court by Elstun, which we, by stipulation, permitted to become a part of the record in the instant case. A supplemental record was filed by defendant June 15, 1938. Brief in support of an application for supersedeas was filed September 15, 1938. Answer brief of the people was filed January 26, 1939. Reply brief of defendant was filed February 28, 1939. On February 10, 1939, a motion was filed by defendant, with consent of the people, for permission to have this matter finally determined upon application for supersedeas, which was granted.

The delay in the disposition of this case is inexcusable. Those who have the responsibility of enforcing and expediting the disposition of criminal cases--and that includes our responsibility--must realize that such delays very seriously impair the proper administration of the criminal law. An expeditious disposition of criminal cases is necessary in the public interest and to a prompt and efficient enforcement of the criminal law. A number of factors enter into this delay, and while we refrain from becoming specific, we again emphatically say that criminal prosecutions should be carried on by those agencies entrusted with such responsibility as expeditiously as possible, consistent with constitutional obligations, rights and liberties. In fairness, we should say that counsel for defendant here did not represent him at the trial.

Counsel have assigned numerous errors, but we believe they may be condensed as follows: (1) Endorsement of codefendants as witnesses without notice; (2) misconduct of district attorney; (3) errors predicated upon petition for writ of error coram nobis; (4) erroneous admission of evidence; (5) jurisdiction as to the fourth and fifth counts of the information; and (6) instructions erroneously given and refused.

No attempt is made in the briefs to summarize the testimony, and, in view of the circumstances, no abstract of the evidence has been submitted. It therefore was necessary that we read the entire record of approximately 1300 pages, or 3700 folios.

The theory of the people, as to the crimes charged in the second, fourth and fifth counts, was, in effect, that the defendant and Hewitt and Elstun, in their conspiracy as officers and agents of Collateral Bankers, Inc., represented to prospective investors that the business of this concern was a financial success as a dividend-paying enterprise; that oil royalties sold by it, and its capital stock, the preferred especially, and also common, were earning substantial dividends, while in truth and in fact dividends were not being earned on the capital stock of the company; that it actually was insolvent; that such dividends as were distributed by the company were paid out of its capital or from sources other than earnings; and that certificates of stock were issued to intended victims on a fictitious value; all of which was known to defendant and Hewitt and Elstun.

This, substantially, was the scheme or plan said to have been entered into by all of the defendants. Numerous facts reflected in the testimony and reasonably to be inferred therefrom make up the total result: such as the age and occupation of the victims; manipulation of dividend payments in such a way as to retain their confidence; the promise, impossible of fulfillment, to cash their stock certificates at any time; the assurance of a seven per cent dividend, with knowledge of inability to pay; the false assurance that the company could pay seven per cent dividends because of large earnings in the short-time loan business; the oft-repeated false representation that the company was making money; the declaring of stock dividends without financial justification, and the holding by the company for months, and in some instances years, of dividend checks after they were prepared; failure to pay dividends, even though declared; false representations that the securities of building and loan companies held by prospective investors in reliable institutions were financially unsound and would greatly depreciate in value, in order to induce the victims to turn such securities over to defendants to be used in the purchase of capital stock of Collateral Bankers, Inc.; the exhibition of photostatic copies of dividend checks to intended victims, such copies being taken Before the originals were delivered to the payees; the sale of oil royalties in one company and delivering deeds of another company, or none at all, and the showing of false financial statements to intended victims to induce them to purchase stock. Two corporations controlled by the defendant through Collateral Bankers, Inc., played an important part in manipulating its financial setup; namely, American Industrial Loan Company and Bush & Company, the assets of which were practically worthless.

The information is predicated upon the dealings which the defendants had with one Emma Nelson, a maiden lady over the age of eighty years, and a resident of Colorado for more than fifty years. Her occupation was that of housekeeper and cook. She had accumulated considerable capital, of which $10,760 was invested with Collateral Bankers, Inc. Hewitt had practically all direct negotiations with Miss Nelson. She was told that the savings bank in which she had her investments would soon close, and that it was at that time paying fifty-two cents on the dollar; that she would lose her entire capital unless she invested in oil royalties, to be obtained for her by Collateral Bankers, Inc.; that she would obtain seven per cent on the preferred stock of Collateral Bankers, Inc. Many other statements were made to her by Hewitt concerning the earnings of the seven-per-cent stock, and certain documents were shown to her, such as photostatic copies of dividend checks, financial statements, and testimonial letters from various sources. She never received any dividend on the stock in the company held by her. In addition to the cash invested, she also turned over to Collateral Bankers, Inc., a $2,000 mortgage on real estate, proceeds of which were to be used in procuring preferred stock in said company; 160 shares were purchased August 28, 1935; 70 shares September 7, 1935; 136 shares November 1, 1935; 55 shares December 20, 1935, and 200 shares February 20, 1936, which exhausted the $2,000 mortgage. On February 25, 1936, she made the last purchase of 40 shares, for which she paid $400. The money paid for this stock was usually received by the defendant. He also assisted in the negotiations to transfer her savings bank stock and deposits to Collateral Bankers, Inc. It is worthy of note that the United States mails were not used in these dealings, all deliveries and payments being made and accepted in person. Hewitt testified on behalf of the people that she as connected with Collateral Bankers, Inc., as a saleswoman in 1933, again in 1935, and until the company closed its business in April, 1936. Defendant told her that the company was a short-time loan company, and that it was paying seven per cent dividends on the preferred and common stock. He gave her a kit with which to work, which contained numerous documents, such as photostatic copies of dividend checks that they were sending to stockholders. Her commission was twenty per cent on stock sales. She first sold Miss Nelson some American Fidelity royalties on the representation that they would pay her one and one-half to two per cent per month. She had difficulty and partially failed in obtaining from defendant the American Fidelity royalties which she had sold to Miss Nelson. She delivered different royalty deeds to Miss Nelson, but did not tell her that they were not the deeds of the American Fidelity Company. The representations to Miss Nelson were made pursuant to instructions from defendant.

One of the bookkeepers for the company testified that he had told defendant and Elstun several times that there were no funds...

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