State v. Ewert

Decision Date04 June 1928
Docket Number6468. [*]
Citation219 N.W. 817,52 S.D. 619
PartiesSTATE v. EWERT.
CourtSouth Dakota Supreme Court

Appeal from Circuit Court, Faulk County; J. H. Bottum, Judge.

Adolph W. Ewert was convicted for misappropriation of money coming into his hands as Treasurer of the South Dakota Rural Credit Board and he appeals. Affirmed.

A. K Gardner, of Huron, and McNamee, O'Keeffe & Stephens and John Sutherland, all of Pierre, for appellant.

Buell F. Jones, Atty. Gen., and Martens & Goldsmith, of Pierre, for the State.

KNIGHT Circuit Judge.

Upon an indictment presented and filed in Hughes county on November 14, 1925, the defendant, Adolph W. Ewert, was convicted of a misappropriation of money which came into his hands as treasurer of the South Dakota Rural Credit Board which office he held from about July 1, 1917, until his removal by the Governor on February 4, 1925. From such conviction and from an order denying his motion for a new trial, he has appealed.

The indictment, omitting formal parts, is as follows:

"That Adolph W. Ewert, late of said county, on or about the 4th day of February in the year of our Lord one thousand nine hundred and twenty-five, at the county of Hughes, state of South Dakota, at a time when said Adolph W. Ewert was the duly appointed, qualified and acting treasurer of the South Dakota Rural Credit Board, then and there a department of the government of the state of South Dakota and a bureau created by the laws of said state, did at said time and place, willfully, fraudulently, unlawfully and feloniousy appropriate and convert to his own use the sum of two hundred eleven thousand, four hundred thirty-seven dollars and fifty-nine cents, lawful money of the United States, of the value of two hundred eleven thousand, four hundred thirty-seven dollars and fifty-nine cents, which said money was then and there the property of said South Dakota Rural Credit Board, and which said sum of money had, prior to said date, and between the 29th day of August, 1922, and said 4th day of February, 1925, both dates inclusive, been collected and received by said Adolph W. Ewert as treasurer of said Rural Credit Board for and on behalf of said South Dakota Rural Credit Board, contrary to the form of the statute in such case made and provided and against the peace and dignity of the state of South Dakota."

Upon the overruling of a demurrer to the indictment, which will be hereinafter discussed, the defendant entered a plea of not guilty, and upon his application the trial was removed to Faulk county. On November 25, 1925, the circuit court made its order permitting the defendant and his representatives to inspect, examine, and take copies of all records of the Rural Credit Board, the joint committee of the 1925 Legislature, and the National Bank of Commerce of Pierre, S. D., and allowing the defendant and his representatives access thereto at all reasonable times. On January 9, 1926, pursuant to the demand of the defendant, a bill of particulars was served upon him, consisting of a detailed audit of accountants who, subsequent to the removal of defendant as such treasurer, had examined and audited the books and records of said board and bank, and thereafter, upon the trial, testified in relation thereto. On the opening day of the trial, the court allowed the application of the defendant for the appointment of two expert accountants to be subpoenaed on his behalf; their compensation and expenses to be paid by the state.

The trial was begun on January 12, 1926, and lasted nearly five weeks. The record is very voluminous. Appellant relies upon 197 assignments of error and specifies five particulars of insufficiency of evidence. All of these assignments of error have been carefully examined. A review of all of them would serve no useful purpose, but a clear understanding of those which are hereinafter discussed necessitates a rather extended statement.

Pursuant to the amendment of section 1, art. 13, of our state Constitution, adopted at the general election in 1916, the Legislature, by the enactment of chapter 333, Laws 1917 (now sections 10150-10173, R. C. 1919), established a system of rural credits and provided for its management and control by the South Dakota Rural Credit Board consisting of the Governor and four members to be by him appointed, one of such members to be designated and known as treasurer of the South Dakota Rural Credit Board.

Section 10153, R. C. 1919, as amended by chapter 304, Laws of 1919, prescribes the duties of such board, and provides that it shall make a monthly statement of its business upon such form as may be required by the executive accountant, whose duty it is, under said section, to audit such statements and make written reports thereon which are required to be filed in his office as a permanent record and a copy forthwith transmitted to the Governor and to the secretary of the board.

Section 10157, R. C. 1919, prescribes as part of the duties of the treasurer of the board:

"To receive and keep safely the money of such board or of the state that may come into his possession" and "to render monthly statements to the board of the transactions of his office."

Section 10166, R. C. 1919, is as follows:

"It shall be the duty of the board, assisted by the executive accountant and superintendent of banks, to prescribe and maintain in the offices of such board such system of books, records, accounts, receipts, vouchers and documents required to separate and verify each transaction and forms for reports and statements required for the administration of the officers of the board or for the information of the public, as such board and assistants shall deem proper and necessary for the safe and convenient conduct of the business of the board."

By section 10154, the rural credit commissioner is made the chief executive officer of the board, and by section 10156 it is made the duty of the secretary to keep such books and records as are necessary or convenient for the conduct of the business of the board. The statute empowers the board to borrow money on the credit of the state, to be used in making farm loans, and provides that all notes and mortgages taken by such board for money loaned shall run to the state of South Dakota. During all the time appellant was treasurer of the Rural Credit Board, he was also president and managing officer of the National Bank of Commerce of Pierre, S. D., and kept a part of his records as such treasurer in such bank, but most of the books, records, and papers pertaining to his office as such treasurer were kept in the state capitol building, in the same room with, but separate from, the records of the Rural Credit Commissioner. Appellant was also one of the incorporators of the Union Trust Company, whose charter was granted in 1890 and expired in 1910. It does not appear that this corporation transacted any business whatever after the expiration of its charter. There was, however, in said National Bank of Commerce at all times from August, 1917, until the day the bank closed an account carried in the name of the Union Trust Company, which account was, during all of said time, under the exclusive control of appellant.

Upon its organization, the Rural Credit Board proceeded to borrow large sums of money upon the credit of the state of South Dakota, and all funds procured during his incumbency came into the hands of appellant, and he received as such treasurer the sum of $61,957,464.97. A large part of this amount was deposited in said National Bank of Commerce, and was therein credited to one of three different accounts denominated respectively, "Rural Credit Board, A. W. Ewert, Treasurer," "Rural Credit Board Collection Account," and "Union Trust Company." After being so deposited portions of such funds were, from time to time, by appellant transferred to other bank depositaries, and a portion was also deposited or transferred to a general collection account in said National Bank of Commerce known as the "Collection" account. All funds received by appellant as such treasurer were, by the accountants, traced to bank deposits, and for each month up to and including December, 1924, appellant filed reports, as required by section 10157, R. C. 1919, purporting to show, among other things, receipts and disbursements, and available funds and where the same were deposited. By the report for December, 1924, filed on January 13, 1925, appellant showed available funds of the board on hand amounting to $3,422,787.60, claimed to be on deposit in approximately 250 banks therein enumerated, including $739,727.99 in Corn Exchange Bank, New York City, $101,599.48 in Continental Trust & Savings Bank, Chicago, $103,679.24 in National Bank of Commerce at Pierre, and $33,257.30 in the collection account in National Bank of Commerce. None of these reports disclosed any deposits in the Union Trust Company account in said National Bank of Commerce.

The day following the removal of appellant as treasurer of the Rural Credit Board, the National Bank of Commerce failed to open and possession and control thereof were thereupon taken over by the Comptroller of the Currency. On the day the bank closed, Marion Heck, the assistant cashier, discovered that the transfer sheets of the ledger account of the Union Trust Company were missing from the file in which they had formerly been kept, and a thorough search for these conducted by the examiner in charge, the accountants, and others were fruitless, and their disappearance has not been accounted for. The current ledger sheet of this account, kept in the current ledger of said bank, which was properly identified and received in evidence, correctly reflects the amount of rural credit funds which were deposited in or withdrawn from the Union...

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