People v. Knox, Gen. No. 50630

• Court: United States Appellate Court of Illinois
• Writing for the Court: McCORMICK; ENGLISH, P.J., and DRUCKER
• Citation: 234 N.E.2d 128,90 Ill.App.2d 149
• Decision Date: 15 December 1967
• Docket Number: Gen. No. 50630
• Parties: PEOPLE of the State of Illinois, Plaintiff-Appellee, v. Vernon J. KNOX, Defendant-Appellant.

Page 128

234 N.E.2d 128 90 Ill.App.2d 149 PEOPLE of the State of Illinois, Plaintiff-Appellee,
v.
Vernon J. KNOX, Defendant-Appellant. Gen. No. 50630. Appellate Court of Illinois, First District, Fourth Division. Dec. 15, 1967.

[90 Ill.App.2d 151]

Page 129

Adamowski, Newey & Riley, Chicago, Frances X. Riley, Chicago, of counsel, for appellant.

John J. Stamos, Chicago, Elmer C. Kissane, Ronald Butler, Chicago, of counsel, for appellee.

McCORMICK, Justice.

The defendant, Vernon J. Knox, was tried before a judge and jury in the Criminal Court of Cook County. The jury returned a verdict finding him guilty of larceny, upon which verdict the court entered judgment and sentenced Knox to the penitentiary for a term of two to five years. From that judgment this appeal is taken.

On June 6, 1962, Knox had been indicted by the Grand Jury of Cook County, together with Robert W. Pfeiffer. The indictment had 11 counts, in all of which Pfeiffer was indicted as principal and Knox either as principal or as aiding and abetting Pfeffer in charges of embezzlement, larceny by bailee, larceny, and obtaining money by use of the confidence game.

In this court the defendant alleges that he was tried and convicted of a crime for which he was not indicted; that his conviction resulted from the State's use of other alleged crimes in the proof that he had committed this one; that the State introduced too much evidence, much of which was irrelevant; that the closing argument of [90 Ill.App.2d 152] the prosecutor was improper; and that the court failed to hold a hearing after a challenge to the involuntary character of the two statements of defendant.

The evidence is that Knox was a lawyer, also a licensed real estate broker, and secretary of his family-owned corporation, Random Realty Company. Hillside Savings and Loan Association, a state-chartered association, was located in Hillside Shopping Center, Hillside, Illinois. It was organized in April 1957, and on April 30, 1963, merged with a Federal savings and loan association. Pfeiffer was its president and managing officer from the time of its organization in 1957 to May 1959, and from May 1959 until November 1960, he was chairman of the board. He was also a member of the board's loan committee.

During 1959 and 1960 the defendant, Konx, had over 100 mortgage transactions with Hillside Savings and Loan. On June 9, 1959, among the applications for loans pending with Hillside was one of a vacant lot in Crystal Lake, which was submitted by Knox. As a part of the transaction he executed a note secured by a mortgage in the sum of $20,500, and as a part of the transaction for the approved loan Hillside issues a check for $19,250; the difference is reflected in charges for making the loan. The $19,250 was deposited in Knox's account on June 12, 1959. This loan will be referred to as Loan No. 1 (File No. 60290). At about the same time Knox gave Pfeiffer his own check for $20,000.

It is claimed that the property in question then had a market value of $3,000. Another loan, which will be referred to as Loan No. 2 (File No. 60369), was made by Knox on February 20, 1960, about eight months after the transaction for which he was indicted and tried.

Two statements were made by Knox before the trial; one to the Attorney General concerning Loan No. 1, wherein Knox said he went to the Attorney General's office of his own free will and volunteered to make the [90 Ill.App.2d 153] statement; that the beneficial interest in trust covering the property was in the Random Realty and Finance Corporation, and that he had authority of direction under that trust agreement; that he had signed the application for a loan on the property in question in the amount of $21,50o for new

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construction; that the value of the lot was $3,000 or $4,000; that Pfeiffer accepted the application and gave the money in a lump sum without following customary procedures; that is, he released the money without asking for waivers or a contractor's statement; that Knox felt that Pfeiffer knew he was loaning a lump sum of money on a vacant piece of property because the application showed that it was for new construction. Knox further stated that he could not explain how a picture of a home on the property in question was attached to the appraisal report of Frank Starek, who had been employed by Knox.

Knox stated that when the money for Loan No. 1 was given to him he turned it over to Pfeiffer; that he planned to build a new home on the lot when Pfeiffer returned the money to Hillside and released the mortgage. Knox also stated that there was an understanding between himself and Pfeiffer that part of the money Knox received as a loan on the property was to be given to Pfeiffer as a loan. Knox stated that he received the check for $19,250 and cashed it; he endorsed it and put it either in his business account or the Ramdom Realty account, but did not keep the money; that on the same day he issued a check to Pfeiffer for $20,000 as a loan. He stated that this check was written out of the Vernon J. Knox Trust Account in the Home State Bank of Crystal Lake; that there was an agreement between him and Pfeffier that Pfeiffer would make the payments on the mortgage; that he was certain Pfeiffer was making the payments because he had agreed to do so; that Pfeiffer told him he was unable to make payments after June 23, 1961, but that he would pay them and bring them up to [90 Ill.App.2d 154] date. Knox further stated that on March 29, 1960, the loan ledger on Loan No. 1 indicated an indebtedness in the sum of $20,456.44, and he could not explain how the entire amount of this mortgage was released as evidence by a document signed by Pfeiffer and Anthony Montalbano, secretary and assistant treasurer of Hillside. Random Realty was indebted to John Laures, and after the release had been secured on the property in question the lot was conveyed to Laures as a part payment of the obligation.

Knox also made a statement to the State's Attorney with reference to Loan No. 1, in which he said that the statement was given voluntarily and without any promise or threat of any kind; that the documents concerning the loan were acknowledged by Knox to be true and correct and bore his signature, and that he had submitted them to Pfeiffer; that Pfeiffer had asked Knox for a loan of $20,000; that the loan which Knox applied for from Hillside was to enable him to make the loan to Pfeiffer; that Knox received $19,250 on the loan he applied for, and that Pfeiffer was the only person at Hillside who handled and processed that particular loan. Knox stated that on the same day he drew a check to the order of Pfeiffer in the amount of $20,000 from a trust account controlled by him; that Knox deposited the check for $19,250 in the trust account at the Home State Bank in Crystal Lake for the purpose of covering substantially the check for $20,000 issued to Pfeiffer; that Knox and Pfeiffer had a conversation in which Pfeiffer stated he would make the payments at Hillside on the particular loan because Pfeiffer was to receive the benefits of the loan; that Knox presented no mechanics lien waivers with respect to any proposed construction or improvements to be made on that property; that Pfeiffer took care of the insurance and that Knox had never made any payments on that loan; that prior to the release of the mortgage he had a [90 Ill.App.2d 155] conversation with Pfeiffer to the effect that it was desirable to release the mortgage in order to improve the particular property. Knox stated that prior to the release of the mortgage he had a conversation with Pfeiffer to the effect that by releasing the mortgage on that particular lot there would be less risk of anyone discovering anything improper with respect to the loan made in June 1959 on account of a too low tax bill or of any physical inspection of the property and finding that it was vacant instead of improved; that at the time in

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March 1960 that the release was secured and recorded, the loan secured by the mortgage which was the subject of that release, was still outstanding and for the most part in principal amount unpaid; that Pfeiffer kept the payment book covering the loan of June 9, 1959, for the purpose of making the loan payments. Knox stated that he had secured the loan with the knowledge that the particular lot on which the loan was made was not in fact improved, and that the release of the mortgage securing the loan was made with Knox's knowledge that the loan secured by the mortgage had not in fact been paid, and that when the lot was conveyed to Laures, Knox knew that the loan was not paid off and that Pfeiffer had no authority to release that particular mortgage at that time.

Knox also made a statement to State's Attorney Bowles with reference to Loan No. 2. Again Knox stated therein that it was given voluntarily and without any promises or threats of any kind; that the application for the loan on Lot 61 in Edgerbrook Heights Addition in McHenry was true and correct and bore his signature; that he had secured the appraisal of John W. Fink, Jr., and had submitted it in connection with the application for the loan; that the check of Hillside Savings & Loan Association CN--4245, dated February 20, 1960, in the sum of $23,848.57, payable to the order of Vernon J. Knox, represented the proceeds of Loan No. 2; that the property [90 Ill.App.2d 156] which was the subject of the loan was not in fact improved but vacant at the time the loan was made; that the application for the loan was made out to show the age of a house allegedly on the lot as one year for the purpose of concealing from Hillside the fact that the property was not improved. Knox stated that the appraisal report also was presented in such form as to be at least somewhat ambiguous and not to show the fact that the property was not improved; that the release of the mortgage was secured by Knox and recorded by him...