People v. Britz

• Decision Date: 07 May 1971
• Docket Number: 5990,Cr. 5989
• Citation: 95 Cal.Rptr. 303,17 Cal.App.3d 743
• Court: California Court of Appeals Court of Appeals
• Parties: The PEOPLE of the State of California, Plaintiff and Appellant, v. Alfred BRITZ et al., Defendants, Alfred Britz and Louis Marder, Defendants and Respondents. The PEOPLE of the State of California, Plaintiff and Appellant, v. Louis MARDER et al., Defendants, Louis Marder, Defendant and Respondent.

Page 303

95 Cal.Rptr. 303

17 Cal.App.3d 743

The PEOPLE of the State of California, Plaintiff and Appellant, v. Alfred BRITZ et al., Defendants, Alfred Britz and Louis Marder, Defendants and Respondents.

The PEOPLE of the State of California, Plaintiff and Appellant, v. Louis MARDER et al., Defendants, Louis Marder, Defendant and Respondent.

Cr. 5989, 5990.

Court of Appeal, Third District, California.

May 7, 1971.

[17 Cal.App.3d 746] John Kappos, Stockton, for defendants-respondents.

Thomas C. Lynch, Atty. Gen., by Doris Maier, Asst. Atty. Gen., and Eddie Keller, Deputy Atty. Gen., Sacramento, for plaintiff-appellant.

BRAY, Associate Justice (Assigned).

Cases consolidated for appeal.

In case No. 5989 the People appeal from an order of the San Joaquin County Superior Court dismissing as to the defendants Britz and Marder counts IV and V of the grand jury indictment.

In case No. 5990 the People appeal from an order of said court dismissing as to defendant Louis Marder count I of the grand jury indictment.

QUESTION PRESENTED

The dismissals were incorrect as there was evidence of intent to defraud.

RECORD

In case No. 5989 an indictment was filed charging defendants Britz, Marder and Sokol in count I with violation of Penal Code section 182 (conspiracy to bribe an employee of a financial institution); in count II with violation of Penal Code section 639 (bribery of an employee of a financial institution); in count III with violation of Penal Code section 182 (conspiracy to commit grand theft); in count IV with violation of Penal Code section 487, subdivision 1 (grand theft); and in count V with violation of Penal Code section 476a (issuing checks without sufficient funds).

In case No. 5990 an indictment was filed charging defendants Marder and Sokol in count I with violation of Penal Code section 487, subdivision 1 (grand theft); in count II (Sokol only) with violation of Penal Code section 476a (issuing checks without sufficient funds); in count III (Marder only), with violation of Penal Code section 639 (bribery of an employee of a financial institution).

In case No. 5989 defendants filed a motion for discovery to suppress evidence and to dismiss the indictments under Penal Code section 995. In case No. 5990 defendant Marder filed such a motion. ¹

In case No. 5989 the court granted the motion to dismiss counts IV and V and denied it as to the other counts. In case No. 5990 the court granted the motion to dismiss count I. In each instance the denial was on the ground that no intent to defraud was evident in the record.

THE FACTS

The facts as disclosed in the evidence before the grand jury were practically the same in each case.

During 1969 Frank Yaddow was the manager of AVCO Thrift Company office on Miner Avenue in Stockton. On September 5, 1969, Louis Marder was sent to Yaddow as a business prospect. Marder told Yaddow that he was the chief stockholder in Westward Investment Corporation and that he was planning to merge that company, along with some others, into Spectrum, Ltd., a public corporation. Marder indicated that when the merger was complete he might consider depositing unused capital in AVCO, and that he would refer the projected three hundred employees of Spectrum to AVCO for loan business. Marder said the merger was secret and when it became public knowledge the value of Spectrum stock would go up rapidly.

Marder told Yaddow that he and Al Britz, his associate in Westward Investment Corporation, had tied up most of their money in the merger and therefore were interested in obtaining a $200,000 loan from AVCO. Yaddow said AVCO normally did not make that large a loan. Marder also expressed interest in AVCO Thrift certificates, which are an investment or savings medium, and took a copy of a certificate with him.

On September 12, 1969, Marder phoned Yaddow and suggested that he and Joseph Broderick, manager of the AVCO Thrift office on Pacific Avenue in Stockton, meet in his room at the Holiday Inn. At the meeting Marder indicated that he had taken over Shield Industries and that since he and Britz had their available capital tied up in completing government contracts for Shield Industries he needed additional cash to complete the Spectrum merger. Marder said Yaddow could assist him since he (Marder) knew of a perfectly legal way to use Thrift certificates to complete the Spectrum deal. Marder said if they could come to terms he would supply 105,000 shares of Westward stock to Spectrum to form a conduit or holding company, and that the stock would be shared equally by Yaddow, Broderick and Marder. Marder mentioned a $100,000 Thrift certificate. At the time Yaddow did not understand how Marder planned to proceed. After this meeting Marder sent Yaddow a letter of intent to form a separate holding corporation.

On September 13, 1969, Yaddow was flown to Las Vegas and entertained at the expense of Westward Investment Corporation. Marder told Yaddow that he (Yaddow) would be a valuable person to have on the board of directors of Spectrum when the merger was completed, at a salary of $25,000 per year, more than double the salary Yaddow was receiving from AVCO Thrift. Yaddow met Britz, one of Marder's associates in Westward Investment.

On September 15, 1969, an agreement was entered into between Herbert L. Sokol and Westward Investment Corporation by Alfred H. Britz. The agreement recited that Sokol had available through a third party approximately $450,000 in various forms of savings certificates which Sokol would lend to Westward for the purpose of 'borrowing, hypothecating or statement.' In exchange Westward agreed to loan Sokol 100,000 shares of its stock all of which Sokol was free to hypothecate and 60,000 of which Sokol was free to sell, but 40,000 of which were to be returned to Westward on termination of the agreement. Westward also agreed to loan Sokol 10 percent of the cash proceeds realized by Westward from hypothecation of the Thrift certificates. Westward declared it was contemplating merger with a publicly held company.

On September 16 or 17, 1969, Yaddow became acquainted with Sokol through Broderick. Sokol said he was in the process of concluding several significant business ventures, that he had money available, that he was extremely interested in Thrift certificates, and that he, Yaddow and Broderick might enjoy a business relationship in the future. A day or two later Marder called Yaddow to a meeting which included Sokol and Britz. Marder needed $100,000 in Thrift certificates that he could use to obtain cash to complete the Westward-Spectrum merger, and he left the problem of consummating the deal to Sokol, Yaddow and Broderick.

On September 22, 1969, Sokol met with Yaddow and Broderick. Sokol proposed that they deliver $100,000 in AVCO Thrift certificates to Marder in exchange for 200,000 shares of Westward stock which Sokol would hold as trustee for the benefit of a to-be-formed corporation in which Marder, Sokol, Yaddow and Broderick would each own 50,000 shares. This agreement was reduced to writing. It was agreed that Sokol would purchase the certificates that day, and that he and Yaddow would go to Las Vegas to complete the transaction with Marder.

Later that day Sokol presented a check payable to AVCO Thrift for $100,000 drawn on the Michigan bank account of Petro Tech and signed by Sokol. Yaddow understood that there were not funds in the Michigan bank to cover the check, but Sokol had shown Yaddow documents which indicated that monies were in transit from overseas. Yaddow believed that there would soon be funds in the Michigan bank account. It was a mandatory AVCO Thrift policy that a Thrift certificate purchased by an out-of-state or foreign country check could not be issued until funds were actually received on the check. It was absolutely impermissible to issue a Thrift certificate in exchange for an insufficient funds check, even if the branch manager was assured that the check would be good by the time it arrived at the bank. Nevertheless, in exchange for the insufficient funds check, Yaddow had two $50,000 AVCO Thrift certificates prepared dated September 22, 1969, and payable to Marder.

Sokol and Yaddow flew to Las Vegas where they met with Marder and Britz. Marder seemed pleased with the agreement they had brought. After a discussion between him and Sokol about discharging some agreement of which Yaddow was unaware, the words 'as per agreement dated Sept. 15, 1969,' were added to the September 22 agreement, and it was signed by Britz, Sokol and Yaddow. At Marder's direction Britz prepared four Westward Investment Corporation stock certificates, each for 50,000 shares, which went to Sokol to hold. Yaddow signed the two $50,000 AVCO Thrift certificates and delivered them to Marder.

On October 6, 1969, the Petro Tech check in the amount of $100,000 signed by Sokol was returned from the Michigan bank for insufficient funds. ² It was a mandatory policy of AVCO that when a check was returned for insufficient funds, AVCO would issue its own check to repurchase the dishonored one. A branch manager was never permitted to resubmit a check or a substitute check without using an AVCO check to repurchase it first. However, on October 8, 1969, Broderick took two $50,000 drafts signed by Sokol to the Bank of America in Stockton to replace the returned $100,000 check. The two $50,000 drafts were not honored by the Michigan bank nor by the San Francisco office of Petro Tech. On October 23, 1969, they were charged against the AVCO account at the Bank of America.

CASE NO. 5989

The Court Erred in Dismissing Count IV and Count V

To warrant the denial of a motion under section 995 of the Penal Code, it is not necessary that the proof be so complete as to justify a conviction of the accused. Probable cause is shown if a man of ordinary caution would be induced by the evidence, heard by the grand jury, to believe and seriously entertain a strong suspicion of the...