People v. Maxey

• Decision Date: 27 July 1955
• Citation: 134 Cal.App.2d 611,286 P.2d 840
• Court: California Court of Appeals Court of Appeals
• Parties: The PEOPLE of the State of California, Plaintiff and Respondent, v. William M. MAXEY, Charles E. Maxey and Clarence Luther Anderson, Defendants. Charles E. Maxey, Defendant and Appellant. Crim. 5396.

Page 840

286 P.2d 840

134 Cal.App.2d 611

The PEOPLE of the State of California, Plaintiff and Respondent, v. William M. MAXEY, Charles E. Maxey and Clarence Luther Anderson, Defendants Charles E. Maxey, Defendant and Appellant.

Crim. 5396.

District Court of Appeal, Second District, Division 3, California.

July 27, 1955.

Hearing Denied Aug. 25, 1955.

Welford R. Wilson, Los Angeles, for appellant.

Edmund G. Brown, Atty. Gen., and Jay L. Shavelson, Deputy Atty. Gen., for respondent.

VALLEE, Justice.

Appellant Charles E. Maxey, his brother William M. Maxey, and Clarence Luther Anderson were charged in count I of an indictment with conspiracy to commit grand and petty theft. Pen.Code, § 182(1). Seventeen overt acts were alleged. Appellant was also charged in counts II, IV, VII, and IX with separate offenses of grand theft, Pen.Code, § 487(1), and in counts III, V, VI, VIII, and X with separate offenses of falsifying and failure to make proper entries in corporate records. Corp.Code, § 3020(a, b). ¹ William M. Maxey was also charged with several counts of grand theft. Appellant was found guilty as charged in counts I to X inclusive. A separate verdict was returned as to each count. William M. Maxey was found guilty as charged in count I and in a number of the other counts. Anderson pleaded guilty to count I. Proceedings were suspended and appellant was granted probation. An order granting probation is deemed to be a final judgment. Pen.Code, § 1237. Charles E. Maxey appeals from the judgment and the order denying his motion for a new trial. His principal contention is that the evidence does not support the verdicts.

Loyal Automobile Insurance Company was a California corporation doing business in the county of Los Angeles, insuring against loss, damage, and theft of automobiles. Anderson testified that in January 1951 the Maxeys informed him they had purchased an insurance company and wanted him to join the organization; they employed him in February 1951 although he had no knowledge of or experience in the insurance business; he was to be trained by William. He later testified the employment was in 1952. An office was set up for him in Santa Monica and he was given the work of handling claims for Loyal. In September 1951 the Jackson family of Detroit, at the solicitation of the Maxeys, purchased a controlling interest in Loyal for about $60,000. Appellant was then elected president and William, secretary. The Maxeys had a small financial interest in the company. The Jacksons remained in Detroit and left the management and control of the company largely in the hands of the Maxeys.

On October 15, 1951 articles of incorporation of Pan-Cosmos Insurance Agency were filed with the secretary of state. William became president; appellant, secretary; and one William Freeman, treasurer, of Pan-Cosmos. On November 13, 1951 the Maxeys and Freeman opened an account in the name of Pan-Cosmos with Bank of America. The office of Pan-Cosmos consisted of a desk and filing cabinets in the room occupied by Loyal. On November 26, 1951 one Price was employed as business manager of Pan-Cosmos. He had little experience in the insurance business and was under the supervision of appellant.

In September 1952 the Maxeys and Anderson purchased Ed Thomas' garage, later renamed 'Swede's Auto Repair,' each to contribute $2,000 to capital. Appellant stated to the others that he could raise the $2,000 but he did not want his name to appear because of his relationship with Loyal and he would substitute the name of his wife. A bank account was opened in the name 'Swede's Auto Repair' on September 12, 1952. Any two of William, Anderson, and one Thomas were authorized to draw on the account. Appellant's wife did not contribute any money to the purchase of the garage or to the capital account which was credited to her.

Count I, Overt Acts 1, 2, 3, 4, and 5. Counts II and III.

Count I alleged as overt acts 1, 2, 3, 4, and 5 the formation of Pan-Cosmos, the execution of an agency agreement between Loyal and Pan-Cosmos, the theft of $3,500 from Loyal by appellant and William, the drawing of a check on Pan-Cosmos' bank account by appellant and its deposit in his personal account, and the drawing of a check for $2,395.75 by appellant on his personal account and its deposit in an escrow transaction. Count II alleged the theft of the $3,500. Count III alleged falsification by appellant and William of Loyal's records with respect to the $3,500 check.

In December 1951 an agreement was executed by Loyal and Pan-Cosmos by which the latter was to become a general agent for Loyal. The agreement was signed by appellant and William on behalf of Loyal and by Price on behalf of Pan-Cosmos. It provided that Pan-Cosmos, as agent, could retain as commissions 10 per cent of premiums collected for Loyal. It also provided for profit-sharing based on the excess of premiums over subsequent claims on policies procured by Pan-Cosmos. On January 10, 1952 appellant, as president, and William, as secretary of Loyal, signed a check on Loyal's bank account for $3,500 payable to Pan-Cosmos. At appellant's direction, Loyal's accountant entered this check on Loyal's records as a contingent commission on a 'retro' contract. The check was deposited in Pan-Cosmos' bank account the same day. At the time of the deposit the balance in the account was $86.05. Immediately following the deposit, two checks were drawn on the Pan-Cosmos account by appellant and William as officers of Pan-Cosmos, one for $3,000 and one for $500. The $3,000 check was payable to Security-First National Bank and was on the same day--January 10, 1952--deposited in appellant's account therein. The $500 check was payable to William and was cashed by him. Prior to the deposit of the $3,000 check, the balance in appellant's account was $68.52. Immediately following the deposit appellant drew a check for $2,395.75 on his account. This check was deposited in an escrow as part payment on a home being purchased by appellant and his wife. Appellant told Loyal's accountant that Pan-Cosmos had produced some $35,000 in insurance and the $3,500 represented a 10 per cent commission. The fact was that the insurance had been written by another agency which placed the insurance with Loyal directly and paid the premiums less commissions directly to Loyal. Pan-Cosmos never remitted any premiums to Loyal.

Count I, Overt Act 6. Counts IV and V.

Count I alleged as overt act 6 the theft of $1,000 by appellant from Loyal. Count IV alleged the same theft. Count V alleged that appellant omitted to make and cause to be made a full and true entry with respect to the $1,000 in the records of Loyal.

Tilford Gaines was insured by Loyal against theft of his Chevrolet between May 1951 and May 1952. In January 1952 his car was stolen. He reported the theft to Loyal and received a check for $1,445. In April 1952 the car was found by the police and title was vested in Loyal pursuant to the terms of the contract of insurance. Appellant informed one Smead that the Chevrolet was for sale and Smead so informed Pete Perry, who offered $1,000 for the car. Perry made a down-payment of $100 by a check payable to appellant and paid the $900 balance by a cashier's check payable to Loyal. The $100 check was endorsed by appellant and given to 'La Tijera Golf, Inc.' No entry was made in the Gaines claim file showing receipt of the $100 or the $900, which should have been applied to reduce Loyal's $1,445 loss on the claim. There was nothing in the records of Loyal to show that $1,000 had been received for the car. Appellant told Loyal's accountant that the $900 had been received by Pan-Cosmos as the result of a sale by the latter of 'a car that it owned' and instructed him to credit against the $3,500 owed by Pan-Cosmos to Loyal, which he did.

Count I, Overt Act 7. Count VI.

Count I alleged as overt act 7 the theft of $85 by appellant and William from Loyal. Count VI alleged that appellant and William falsified the books of Loyal by drawing a check for $85 payable to James Construction Company and entering it on the records of Loyal as payment for painting and shelving when Loyal was not indebted to James.

On March 24, 1952 a check for $85 was drawn on Loyal's account by appellant and William payable to James Construction Company. At appellant's direction, the amount was entered on Loyal's disbursement journal as payment for work done on its...