People v. Beber

• Decision Date: 22 May 1951
• Docket Number: Cr. 2623
• Citation: 231 P.2d 516,104 Cal.App.2d 359
• Court: California Court of Appeals Court of Appeals
• Parties: , Blue Sky L. Rep. P 70,161 PEOPLE v. BEBER et al.

Page 516

231 P.2d 516

104 Cal.App.2d 359, Blue Sky L. Rep. P 70,161

PEOPLE v. BEBER et al.

Cr. 2623.

District Court of Appeal, First District, Division 1, California.

May 22, 1951.

Marcel E. Cerf, Robinson & Leland, San Francisco, for respondent Beber.

Leslie C. Gillen, John R. Golden, San Francisco, for respondent Churchill.

Arthur F. Edwards, San Francisco, for respondent Kobritz.

Fred N. Howser and Edmund G. Brown, Attys. Gen., Clarence A. Linn, Deputy Atty. Gen., for appellant.

FRED B. WOOD, Justice.

On March 29, 1949, the grand jury presented an indictment in which the People accused defendants of conspiring to violate the Corporate Securities Act, Gen.Laws, Act 3814 (count I), of violating section 3 of that act by selling shares of a certain corporation without a permit from the state corporation commissioner (count II), and of committing grand theft by feloniously taking $20,000, the property of one Harry Randall (count III). The trial court dismissed the indictment. Plaintiff appeals.

In respect to each of the three counts, there are these issues upon this appeal: (1) Were the defendants indicted without reasonable and probable cause? and (2) was the crime charged barred by the statute of limitations?

In count I, defendants Beber, Kobritz and Churchill are accused of violating section 182 of the Penal Code, i. e., that they continuously from January 13 to and including March 30, 1949, willfully, unlawfully and feloniously conspired 'to aid in the issue and sale of and to sell and to cause and assist to be issued, executed and sold securities in non-conformity with a permit of the Commissioner of Corporations * * * contrary to the provisions of the Corporate Securities Act * * * and to willfully violate and fail to comply with the provisions of the Corporate Securities Act * * * and to collect, aid in collecting, and make collections of the consideration to be paid on account of subscriptions for sales of stock in a corporation, to wit, Churchill's Frozen Foods, Inc., prior to and before the issuance of a permit of the Commissioner of Corporations * * *.' The defendants, this count alleges, committed 12 overt acts in pursuance of the objects of the conspiracy. We are concerned principally with the 7th, 8th, 9th and 12th alleged overt acts, described as follows: That on March 25, 1946, defendants Beber and Kobritz had a conversation with Harry Randall and Ed Randall at the office of Allied Produce Company, San Francisco; on March 30, 1946, defendants Beber and Kobritz received and collected $20,000 from Harry Randall; on April 8, 1946, defendants Beber, Kobritz and Churchill mailed to Harry Randall a receipt for $20,000, consideration for 200 shares of stock in Churchill Frozen Foods, Inc., a corporation; and on July 28, 1946, the defendants transported Harry Randall and other persons to Stockton from San Francisco.

It appears from the evidence before the grand jury that Churchill Frozen Foods, Inc., was incorporated March 7, 1946. The first application for a permit for the sale of stock was made April 19th. Supplemental applications or amendments were made April 24 and May 8, 1946. On the latter date a permit was granted.

The permit indicated that the corporation was to take over the business which until then had been conducted as a partnership by Harold F. Churchill, A. Schapiro and Edmund Nies under the name of Harold F. Churchill Company; that the company proposed to issue to each of the partners 914 shares of stock; that the corporation proposed to sell 1500 shares to the public to liquidate the liabilities of the predecessor partnership and to add to the working capital, and 750 shares to certain persons for organization and promotional services. The application showed assets of the partnership were $257,193 and liabilities $191,965. The net worth of the partnership, according to an appraisal made by the appraiser appointed by the corporation commissioner, was about $91,000.

The evidence before the grand jury showed that Harry Randall (who had known Kobritz since 1944, and through his brother, Edward Randall, had heard from Kobritz about Churchill Frozen Foods, Inc.) went to see Kobritz at the office of Allied Produce Company, on March 25, 1946. Beber, called in by Kobritz, told Randall in Kobritz' presence that he, Beber, was selling stock in Churchill Frozen Foods, Inc., of Stockton; that the money from the sale of the stock was to be used for the building of a frozen food plant in Stockton and for buying equipment; that in the last four or five years the company made a profit of around $15,000 to $18,000 a year; that by building a plant they would be able to materially increase their profit; that he, Beber, dictated the policy of the company, that is, he told them what to do and what not to do when it came to freezing foods; that no processing of foods was undertaken until orders had arrived and in that way there was no possibility of loss due to merchandise on hand not being sold; and that the stock was being sold only to certain people and that he, Beber, was buying $10,000 worth of the stock. At this meeting Beber produced a stock subscription agreement which Randall signed, subscribing for 200 shares of stock at a par value of $20,000. Beber told Randall he would like to have payment by the end of the month, and to make the check payable to 'Churchill Frozen Food Corporation,' and to bring the check down to Beber and if the latter was not in to leave it with Kobritz.

On March 30, 1946, Randall took to Beber's office a check for $20,000, payable to Churchill Frozen Foods, Incorporated, and signed by Harry Randall as drawer. Beber was not in, so Randall gave it to Kobritz. Kobritz accepted the check and said to Randall, 'I'll see Mr. Beber gets it, and you will get a receipt in a few days.' Three or four days later, Randall received a receipt, on the letterhead of Harold F. Churchill Company, bearing the signature of Mr. Schapiro. Randall's check was endorsed by Harold F. Churchill, was deposited in the Bank of America at Stockton on April 2, 1946, and was paid by the drawee bank on April 4th. On or about May 16th, Randall received a certificate of stock of the corporation.

In June, Kobritz told Randall that things with respect to the corporation were coming along very nicely. In July, 1946, Randall and his brother were taken to a stockholders' meeting in Stockton. They were notified of this meeting by Beber through Kobritz. They went to Stockton in Beber's car. Randall met Churchill for the first time at this meeting.

Count I of the indictment also alleged the commission of certain overt acts in connection with the sale and issuance of shares of the same corporation to Philip Krieg and to George S. Helms. With reference to those transactions, the evidence before the grand jury indicated that early in 1946 Kobritz told Philip Krieg how good the produce business was, that he had changed from the company he used to work with to another and that they were doing a fabulous business; that his four partners would invest $10,000 each in some frozen food business and if they had their own freezing plant they could save a lot of hauling; and that they were going to organize a corporation and build a plant. In February, 1946, Krieg went to Kobritz' office and Beber was called in. Beber showed Krieg a statement of the Harold F. Churchill Company showing profits of from 25 to 27 per cent. Beber said he was going to invest $10,000 in the company. No mention was made of any indebtedness of the company. Beber produced a stock subscription agreement and asked Kreig if he wanted to subscribe for some stock. Krieg subscribed for 50 shares. Kobritz was present during the entire conversation. Beber and Kobritz said the money from the subscriptions was to go to build a new plant in Stockton. Beber's name was on the list as subscribing for 100 shares. Beber told Krieg he would let him know later as to how the shares were to be paid for. On March 7th, Kobritz telephoned Krieg, asking if he could come to the office and bring a check. Krieg did so and signed it and gave it to Kobritz, who took it to Beber's office. About a week later, Krieg received a receipt on the letterhead of the Harold F. Churchill Company. Sometime in May, 1946, he received through the mail a stock certificate bearing date May 21, 1946. Krieg, with Randall, went to Stockton in July, 1946, in Beber's car to see the new plant, which Krieg described as follows: 'And there was a shed there, a shed about a hundred feet long, but there was only the frame up, and the trusses, and part of the roof was on. The roof was aluminum, corrugated aluminum sheets and sides, maybe 20 or 30 feet was up. There was no new machinery, but they showed us a base where a freezer was going to stand, the motor was going to stand, a cast block concrete base. Outside of that there was nothing done, you couldn't see anything where the money went, yet. But it was war time yet, and they said we had to have a priority, that many things was very hard to get, but they plant would be complete in a short while.'

George S. Helms had a conversation with Kobritz in regard to Churchill Frozen Foods, Inc. Kobritz told him of a plan to erect a cold storage plant and that $300,000 was needed to do it. Helms asked if he could invest and Kobritz told him to see Beber. Helms saw Beber in February, 1946, and Beber told him $300,000 was needed to build a cold storage plant; that the three partners of Allied Produce Company were each putting up $10,000, and that he, Beber, had subscribed to $10,000 in stock of Churchill Frozen Foods, Inc. Two or three days later, Helms signed a subscription agreement for $2500 of that stock. Ten days or two weeks later, Beber asked for the money. On March 12th, Helms obtained a cashier's check for $2500, which he delivered to Beber that day or a day or two later. Within 10 days Helms received an undated receipt, on the letterhead of ...