State ex rel. Marachowsky v. Kerl

• Decision Date: 09 January 1951
• Citation: 45 N.W.2d 668,258 Wis. 309
• Parties: STATE ex rel. MARACHOWSKY, v. KERL, Sheriff.
• Court: Wisconsin Supreme Court

Page 668

45 N.W.2d 668

258 Wis. 309

STATE ex rel. MARACHOWSKY, v. KERL, Sheriff.

Supreme Court of Wisconsin.

Jan. 9, 1951.

Rehearing Denied March 6, 1951.

Rubin & Ruppa, Milwaukee, Francis P. Mayo, Madison, Wm. B. Rubin, Milwaukee, of counsel, for plaintiff in error.

Thomas E. Fairchild, Atty. Gen., Wm. A. Platz, Asst. Atty. Gen., Robert W. Arthur, Dist. Atty. for Dane County, Madison, for defendant in error.

GEHL, Justice.

It is the contention of the defendant that no verified income tax return was filed. The facts are stated in State ex rel. Arthur v. Proctor, 1949, 255 Wis. 355, 356, 38 N.W.2d 505: 'As the evidence was taken at the hearing, it appeared that the return was signed at the home of the accused in Portage, Columbia county, Wisconsin, and was not sworn to before any notary at that time. The return was then mailed to a certified public accountant retained by the Portage Store Company in Madison. Counsel for the accused then stipulated that the return was 'duly filed' in the state income tax office at Madison, Wisconsin. The return as filed appeared to have been notarized by a notary public for Dane county.'

The state relies upon the certificate and seal of the notary as sufficient evidence that the verification of the tax return was properly sworn to before the notary public. The only evidence to the contrary is the testimony of Bess Marachowsky, wife of the defendant.

Stamps, dated February 22, 1948, of the department of taxation indicating its receipt, appear on the return. Beyond any question, the return was filed as a verified return as required by law and the amount of the tax computed thereon was paid coincidentally with the filing of the return. Defendant relied upon the verification of the statement as a compliance with the law when it was advantageous for him to do so, and he cannot now repudiate the statement on the ground that the verification was not in fact made as required by law. An estoppel is the answer to such a claim.

The main issue in this case is whether there is sufficient evidence to establish probable cause that the defendant knowingly made a false return with intent to evade the assessment of income taxes against the corporation.

It is well established in this state that the evidence at a preliminary hearing need not be sufficient to prove the charge against the defendant beyond a reasonable doubt. The reviewing court can examine the evidence only sufficiently to discover whether there was any substantial ground for the exercise of judgment by the committing magistrate. When the reviewing court has discovered that there is competent evidence for the judicial mind of the examining magistrate to act on in determining the existence of the essential facts, it has reached the limit of its jurisdiction and cannot go beyond that and weigh the evidence. State v. Whatley, 1933, 210 Wis. 157, 160, 245 N.W. 93, 99 A.L.R. 749; Chambers v. State, 1940, 235 Wis. 7, 9-10, 291 N.W. 772.

The defendant, Solomon Marachowsky, owns the bulk of the stock (except for the necessary qualifying shares of other directors) in the Portage Store Company. He is the president of the corporation and, as such, filed Exhibit 1, the income taxreturn heretofore referred to. On the second page of the income tax return there appears under 'gross income' the following item:

'1. Gross Sales, cash and credit less returns and allowances. ..... $682,818.01'

That figure, as well as all other figures in which the gross sales enter into the computation, are alleged by the state to be false and fraudulent. Exhibit 3, a computation made by the auditor of the tax department on February 23, 1948, shows that the corporation made gross sales in the amount of $41,800 which are not recorded in the books of the corporation and which are not reflected in the tax return.

Romelle Hasse testified: During the time covered by Exhibit 3 (July 5, 1946 through December 23, 1946), she was employed as a cashier by the Portage Store Company. It was her duty to collect the daily receipts from the cash registers each day and from these and certain slips showing money paid out, to compute the gross sales of each department. She did this on slips of paper called 'daily register forms'. After she completed that computation, the figures were transferred to a 'daily statement' sheet and at the end of the week these totals were entered on what was known as a 'weekly report.' Both the daily and weekly statements should reflect the sales made by each department in the store. Mrs. Bernadine Marachowsky entered in the journal the daily sales figures from the daily statement.

Mrs. Hasse from time to time set aside part of the cash receipts in a desk drawer and entered on the daily statement a sales figure for various departments in the store substantially less than the true figure as reflected in her computation on the cash register slip. It was her duty to prepare and make the bank deposits. On those occasions when she entered a smaller amount than the true figure on the daily statement, she withheld from the bank deposit an amount equal to the difference between the true amount and the false figure entered on the daily statement. The money withheld was changed into large bills and placed in a box in a drawer in the desk which she used The key to this desk was kept under a lamp on her desk. From time to time the money thus set aside disappeared from the desk.

Mrs. Hasse expressly denied that she ever took any of the money thus set aside or that she profited personally from the scheme.

On February 23, 1948, the tax department auditor went to the office of the Portgage Store Company to commence an income tax audit. He asked Jule Marachowsky, a brother of the defendant and an employee at the store, for certain records. These were supplied for examination. The defendant at that time was in Virginia and Jule testified that on that day he was taking Sol's place and he would say he was the 'head man' on that day. On February 26, 1948, the auditor returned to continue his audit. A number of records which he had seen on his first visit had disappeared. Mrs. Hasse quit in September, 1947, and was no longer employed at the store.

The auditor testified that on February 23, Jule Marachowsky showed him a book, described as a 'black book' kept by some one in the Portage Store Company for recording the daily sales of each department, by recording there the cash register readings at the beginning of the day, cash register readings at the end of the day, the difference and adjustments for paid-outs and register errors, in order to arrive at the cash receipts for the day. He was also shown a box of cash register reconciliations for each store operating day of the years which he was examining. He was shown and examined the daily statements which were represented to him by Jule and Bernadine Marachowsky as records of the Portage Store Company, and are a part of the deposition of Romelle Hasse.

When he finished work on that day, he took with him Exhibit C which is the cash register reconciliation slips prepared on December 14, 1946 by Romelle Hasse, as testified by her. When he left he turned over to Jule the records he had been looking at and told him to preserve them and also to procure for him certain records of the same type for other years.

On February 26 he looked for the 'black book' and the daily cash register reconciliations in which he was interested but was unable to find them. On March 3 defendant had returned from Virginia and the auditor had some conversation with him. A search was made at that time for the material referred to, but they were unable to find it. The defendant mentioned that with thirty or thirty-five employees in the store it is possible that someone could have thrown it away.

The first column of Exhibit 3 shows 'Net cash per register check-out slip.' The figures in that column were obtained by the auditor from the black book and were verified by figures found in the cash register reconciliation slips. The second column shows 'Net cash per daily sales record.' On...