State v. Johnson

• Decision Date: 08 September 1960
• Docket Number: No. 35259,35259
• Citation: 56 Wn.2d 700,355 P.2d 13
• Court: Washington Supreme Court
• Parties: STATE of Washington, Respondent, v. Francis A. JOHNSON, Appellant.

Page 700

56 Wn.2d 700

355 P.2d 13

STATE of Washington, Respondent, v. Francis A. JOHNSON, Appellant.

No. 35259.

Supreme Court of Washington, Department 1.

Sept. 8, 1960.

Rehearing Denied Oct. 21, 1960.

Hoof, Shucklin & Harris, Seattle, for appellant.

Charles O. Carroll, Hugh R. McGough, Frank L. Sullivan, Seattle, for respondent.

OTT, Justice.

October 3, 1958, Francis A. Johnson was charged by an amended information with thirty-six counts of uttering a forged instrument, and with twenty-eight counts of grand larceny by false representations. The charging portion for each count of the two crimes was identical, except as to names and amounts involved, and was as follows:

'I, Charles O. Carroll, Prosecuting Attorney in and for the County of King, State of Washington, * * * by this Amended Information do accuse Francis A. Johnson of the crime of Grand Larceny, committed as follows:

'He, the said Francis A. Johnson and Robert E. Haber, deceased, in the County of King, State of Washington, on or about the 5th day of December, 1955, with intent to deprive or defraud the owner thereof, willfully, unlawfully and feloniously did obtain from The Travellers Insurance Company, a corporation, certain personal property, towit: lawful money of the United States in the sum of $4,100.00, the property of The Travellers Insurance Company, by means of false or fraudulent representations, pretenses and writings, towit: A false and fraudulent claim prepared and presented to the Travellers Insurance Company for loss and damage to a dwelling and its contents, located at 2129 47th Avenue Southwest, Seattle, Washington, owned by F. E. Sanson, and insured by the Travellers Insurance Company, which claim was false and fraudulent in the following respects: Writings contained in the said claim represented that on the 18th day of November, 1955, a furnace explosion caused loss and damage to the above described house and its contents, when in fact there had been no explosion. Writings contained in the said claim represented that the above described dwelling suffered a total insured loss of $4,100.00, when in fact there had been no loss or damage. Writings in the claim represented that said claim was being presented by the insured, F. E. Sanson and that said insured signed the proof of loss statement contained therein, when in fact the insured had no knowledge of the claim and signed none of the documents contained therein.

'Court II. And I, Charles O. Carroll, Prosecuting Attorney aforesaid, further do accuse Francis A. Johnson of the crime of Uttering a Forged Instrument committed as follows:

'He, the said Francis A. Johnson, in the County of King, State of Washington, on or about the 5th day of December, 1955, as part of the same transaction alleged in Court I and connected therewith, with intent to defraud, willfully, unlawfully and feloniously and knowing the same to be forged, then and there did utter, offer, dispose and put off to the Peoples National Bank of Washington, a corporation, a certain false and forged instrument, towit: a sight draft payable to F. E. Sanson and Olympic Building Co. in the amount of $4100.00, dated December 2, 1955, and drawn on the National Bank of Commerce of Seattle.'

The defendant entered a plea of not guilty to the amended information. From a judgment and sentence based upon a verdict of guilty of the twenty-eight counts of grand larceny and thirty-five of the thirty-six counts of uttering a forged instrument, the defendant has appealed.

The record discloses that Robert E. Haber was a friend and business associate of appellant Johnson, who was a building contractor. Haber was the supervising adjuster of fire loss claims for the Travelers Insurance Company in its Seattle office. He had authority to issue drafts for the payment of individual claims up to five thousand dollars.

The office procedure of the Travelers Insurance Company for payment of a claim of loss by an insured commenced with the receipt by Haber of the insured's notice of loss. A clerk then established a file for this claim, assigning it a number. The file was sent back to Haber or to an adjuster designated by him. Thereafter, an adjuster's report, a notarized proof of loss by the insured, and other relevant documents were added to the file. A draft in payment of the claim was issued, based upon the information contained in the file.

Over a period of time, Haber prepared numerous false or altered claim files in the names of persons who were insured by Travelers but who had actually sustained no damage, or had suffered an actual loss in a lesser amount than that represented by the false claim file. Most of these files contain estimates or bills on the letterheads of building companies owned or controlled by Johnson.

After supplying the file with the required falsified documents, Haber would then authorize the issuance of a draft in payment of the false or altered claim. The drafts, made payable to the claimants named in the false claim files, would be directed 'To Office Manager, The Travelers Insurance Company, Republic Building, Third Avenue and Pike Street, Seattle, Wash.

Payable Through

The National Bank of Commerce of Seattle, Seattle, Wash.'

The endorsement of the signature of the payee, on the reverse side of each draft, was forged by someone unknown. Each of the drafts described in the amended information contained a second endorsement as follows: 'Olympic Building Co., F. Johnson (owner).' Johnson admitted signing the second endorsements. Johnson then negotiated the drafts by depositing them in a special Olympic Building Company account. The special account was owned by Johnson. He later tansferred most of the funds from the special Olympic Building Company account to a bank account owned by the Hajo Corporation, which corporation had been formed by Johnson and Haber. Haber committed suicide before the charges were filed.

Appellant's ten assignments of error raise four contentions:

(1) The evidence was insufficient to establish the crime of grand larceny by false representations, and, if any crime was established by the facts, it was that of embezzlement, with which offense the appellant was not charged. He relies on State v. Smith, 1939, 2 Wash.2d 118, 98 P.2d 647, 648.

In the Smith case, the defendant was charged with larceny. He was the manager of a warehouse company and was the only officer of the company who was authorized to draw checks on the company bank account. We held that the facts established the crime of embezzlement and not larceny, because the funds were in Smith's lawful possession at the time he unlawfully appropriated them to his own use. Quoting with approval from 18 Am.Jur. 572, § 3, the distinction between larceny and embezzlement was stated as follows:

"* * * The chief distinction between the two crimes lies in the manner of acquiring possession of the property. In embezzlement, the property comes lawfully into the possession of the taker and is fraudulently or unlawfully appropriated by him; in larceny, there is a trespass in the unlawful taking of the property. Embezzlement contains no ingredients of trespass, which is essential to constitute the offense of larceny. Moreover, embezzlement does not imply a criminal intent at the time of the original receipt of the property, whereas in larceny the criminal intent must exist at the time of the taking."

In the instant case, Haber was not in possession of the funds at the time he appropriated them to his own use. He did not obtain possession thereof until other agents of the company, who had possession of the funds, caused the drafts authorized by Haber to be honored. The fact that Haber had authority to write drafts against the company does not establish that he had possession of the company's funds against which the drafts were written. The funds which were to pay the drafts were in the possession of other agents of the company. Haber's authority was only to order the payment of the company's funds. Haber's acquisition of possession of the company's funds being wrongful, he did not embezzle the funds and the rule of the Smith case is not apposite. Appellant was properly charged as an accessory to the crime of larceny by false representations.

Appellant further contends that he is not guilty as an accessory to the crime of larceny by false representations because there was no evidence that any false representations were communicated to the Travelers Insurance Company, and no evidence that the company relied upon any false representations.

We do not agree. Haber prepared the false claim files. Haber's superior in the company testified as follows:

'Q. Now can you determine from examining State's Exhibits 2 [a false claim prepared by Haber] and 3 [a draft payable to the claimant] whether this check was issued in reliance--whether the check, State's Exhibit 3, was issued because State's Exhibit 2 was prepared? A. That is correct. Your...