People v. Crosby

• Decision Date: 09 November 1962
• Docket Number: Cr. 7149
• Citation: 25 Cal.Rptr. 847,375 P.2d 839,58 Cal.2d 713
• Court: California Supreme Court
• Parties: , 375 P.2d 839 The PEOPLE, Plaintiff and Appellant, v. Joseph W. CROSBY et al., Defendants and Respondents.

Page 847

25 Cal.Rptr. 847

58 Cal.2d 713, 375 P.2d 839

The PEOPLE, Plaintiff and Appellant, v. Joseph W. CROSBY et al., Defendants and Respondents.

Cr. 7149.

Supreme Court of California, In Bank.

Nov. 9, 1962.

As Modified on Denial of Rehearing Dec. 5, 1962.

Stanley Mosk, Atty. Gen., William E. James, Asst. Atty. Gen., Norman H. Sokolow, Deputy Atty. Gen., William B. McKesson, Dist. Atty., Los Angeles, Harry Wood, Robert J. Lord and Harry B. Sondheim, Deputy Dist. Attys., for plaintiff and appellant.

John Leo Harris, Los Angeles, Shulman & Shulman, Adley M. Shulman, Beverly Hills, J. E. Simpson, Robert A. Eaton, Los Angeles, J. Edward Fleishell, San Francisco, Loeb & Loeb, Herman F. Selvin, Los Angeles, and Clarence S. Hunt, Long Beach, for defendants and respondents.

SCHAUTER, Justice.

The People appeal from an order setting aside an indictment as to defendant Dardi, Seltzer, Blau, Smith, Hopps, and Drezner, and setting aside several counts thereof as to defendants Crosby and Schinasi.

The principal contentions of the People are (1) that the superior court erred in denying leave to amend the indictment before entry of defendants' pleas, and (2) that the record contains competent evidence to support the factual allegation in the indictment that an over act (number 18) in furtherance of the conspiracy was committed within three years prior to the filing thereof on October 4, 1960. We have reviewed the record and have concluded that these contentions are meritorious.

The indictment is the result of a grand jury investigation into the management of the Equitable Plan Company (hereinafter called 'Equitable Plan'), and industrial loan company authorized under the Industrial Loan Law (Fin.Code, div. 7) to obtain funds from the public by issuing 'thrift certificates' in the form of savings bank passbooks and to use such funds to make loans or to purchase conditional sale contracts.

In June and July 1957, the Commissioner of Corporations ordered Equitable Plan to discontinue certain unsafe and injurious practices in the conduct of its business (Fin.Code, § 18815) and to make good an extensive impairment of its capital (id., § 18814). On December 20, 1957, the Commissioner formally took possession of the company because of its failure to comply with such orders (id., § 18818). The court-appointed trustee testified that the loss of capital to Equitable Plan's 4,500 depositors, most of whom are elderly persons, will total between six and seven million dollars.

In Count I of the indictment defendants Birrell, Prior, Berkwit, Skoglund, Crosby, Schinasi, Dardi, Seltzer, Blau, Smith, Hopps, nd Drezner are charged with the crime of criminal conspiracy to commit crimes, to cheat and defraud by criminal means, and to obtain money by false promises with fraudulent intent not to perform such promises, in violation of section 182, subdivisions 1, 4 and 5 of the Penal Code. Counts II through VII charge acts of grand theft in violation of section 487, subdivision 1, and Count VIII charges violation of Corporations Code, section 3020, subdivision (b), through the falsification of corporate records. Not all the defendants are charged with commission of the substantive offenses, as will hereinafter be set forth.

Of the twelve named defendants, only eight are parties to this appeal. ¹ Each of these eight made timely motions in the superior court to dismiss the indictment. (Pen.Code, § 995.) The court granted the motions of six defendants as to all counts charged, and of two defendants as to Counts II through V. ² The People appeal from the order entered accordingly, insofar as it sets aside Count I and Counts II through V; no appeal is taken from the dismissal of the remaining counts. The present procedural posture of the case with respect to the motions of respondent defendants is summarized in the following table:

Sufficiency of the Evidence. In arguing the question of the sufficiency of the evidence, counsel for the several defendants (in ultimate effect) give inadequate recognition to the fact that it is an indictment, not a judgment of conviction, that is here challenged. In these proceedings all parties must be guided by our settled rule that 'An indictment will not be set aside or a prosecution thereon prohibited if there is some rational ground for assuming the possibility that an offense has been committed and the accused is guilty of it.' (Bompensiero v. Superior Court (1955) 44 Cal.2d 178, 183-184(3), 281 P.2d 250.) As hereinafter more fully discussed, there must be legal, competent evidence as the basis of that 'rational ground.' While the record before us is not a model of clarity, the complexity of the financial transactions and manipulations involved may well explain such a presentation. At the grand jury hearings a total of 32 witnesses testified and some 330 exhibits were introduced. From the competent items of evidence thus presented, which need not be set out here in detail, the grand jury could reasonably have inferred (1) that in October 1953 defendants Birrell, Prior, Crosby, Schinasi, Dardi, and Smith conspired to buy Equitable Plan with $263,000 of its own money; (2) that these defendants, together with defendant Hopps, conspired during the ensuing six to eight months to appropriate to their own use some $700,000 in cash reserves of Dequitable Plan by purchasing (from Hopps) and then cancelling an alleged policy of credit insurance, and by making alleged loans of $450,000 to corporations controlled by Birrell; (3) that defendants Drezner, Seltzer, and Blau subsequently took active part in the conspiracy and between 1954 and 1956 carried out a plan of making further alleged loans to Birrell-controlled corporations in the amount of three to four million dollars, which loans have proved to be virtually uncollectible; and (4) that in early 1957 defendant Berkwit joined the conspiracy and by means of the purchase of certain alleged 'choses in action' (i. e., rights to receive rentals on oil drilling equipment leased to Birrell-controlled companies) consummated a wash transaction designed to simulate payment of some $600,000 owed to Equitable Plan by corporations owned or controlled by the various defendants. Tested by the Bompensiero standard, there is thus sufficient competent evidence to hold the defendants to answer to the counts here in issue.

Proposed Amendment of Count II. During argument on the motions to dismiss the People orally moved to amend Count II of the indictment by interlineation. Count II charges Crosby, Schinasi, Dardi, and three defendants not here involved, with the theft of $212,445.88 from Equitable Plan on October 28, 1953. The proposed amendment would have changed the amount allegedly stolen to $250,000 and the date of the theft to October 26, 1953. The superior court denied the motion on the ground that to allow the amendment would be the equivalent of changing the offense charged, in violation of Penal Code section 1009. ³ The People contend that the ruling was in error, in that the amendment merely sought to correct an obvious clerical mistake.

The contention is well taken. As they now read, Counts II and III both purport to charge the same defendants with committing grand theft from Equitable Plan on the same day (October 28, 1953) and in precisely the same amount ($212,445.88). The evidence, however, shows only one transaction in that amount occurring on that day: the payment of the second of four alleged premiums on credit insurance taken out by the new management of Equitable Plan (including several of the respondent defendants) during the fall and winter of 1953-1954. The first premium was paid by a check for $250,000 on October 26, 1953, as alleged in overt act number 3. The third premium was paid by a check for $150,000 on December 1, 1953; Count IV charges grand theft in that amount and on that date. And the fourth premium was paid by a check for $27,343.95 on January 4, 1954; Count V charges grand theft in that amount and on that date. In the premises it is evident that the grand jury intended to charge one count of grand theft for each premium payment made; and that the duplication of dates and amounts in Counts II and III, when viewed in the light of the failure to charge as grand theft the first of the four payments, was the result of a simple clerical or typographical mistake in drawing up the multiple counts of the indictment. The timely correction of such a mistake does not 'change the offense charged' and hence is permissible. (See, e. g., United States v. Denny (7th Cir. 1947) 165 F.2d 668, 670(6), cert. den. 333 U.S. 844, 68 S.Ct. 662, 92 L.Ed. 1127 (typographical error in charging defendant's name); United States v. Choy Kum (N.D.Cal.1950) 91 F.Supp. 769(1) (mistaken citation of statute allegedly violated); People v. Jim Ti (1867) 32 Cal. 60, 64 (mistake in alleging defendant's name); ⁴ People v. Kelly (1856) 6 Cal. 210, 212-214 (same); People v. Blair (1961) 195 Cal.App.2d 1, 7(1), 15 Cal.Rptr. 533 (same); People v. Wilder (1955) 135 Cal.App.2d 742, 749(8), 287 P.2d 854 (mistaken allegation of date of commission of offense); People v. Stone (1949) 89 Cal.App.2d 853, 859-860(1), 202 P.2d 333 (same); People v. Bocchio (1926) 80 Cal.App. 138, 141(1), 251 P. 672 (mistaken allegation of value of property obtained by false pretenses): People v. Carroll (1919) 39 Cal.App. 654, 656-657, 180 P. 4. (mistaken allegation of another name for that of defendant); cf. People v. Courtney (1933) 132 Cal.App. 198, 201(1), 22 P.2d 740 (mistake in charging two identical counts).)

The record shows that at the time of the motion to amend no defendant had yet pleaded to the indictment, ⁵ nor had any demurrer thereto been sustained. In such circumstances Penal Code section 1009 (ante, fn. 3) expressly authorizes the district attorney to amend the indictment as a matter of right, subject only to the requirement that it not be amended so as to change the offense...