State v. Levy

• Decision Date: 16 May 1941
• Docket Number: 28086.
• Citation: 8 Wn.2d 630,113 P.2d 306
• Parties: STATE v. LEVY.
• Court: Washington Supreme Court

113 P.2d 306

8 Wn.2d 630

STATE v. LEVY.

No. 28086.

Supreme Court of Washington

May 16, 1941

Department 1.

Arnold Levy was convicted of misappropriating public funds and second degree forgery, and he appeals.

Reversed with direction.

BLAKE J., dissenting in part.

Appeal from Superior Court, Snohomish County Ralph C. Bell, judge.

Tom W Holman and Harold A. Pebbles, both of Seattle, and Stiger & Stiger, of Everett, for appellant.

Heldeman & Walthew, of Seattle, amici curiae.

Ralph Smythe and Max Church, both of Port Angeles, for respondent.

STEINERT Justice.

An information filed by the prosecuting attorney of Clallam county charged defendant, Arnold Levy, formerly a county commissioner of that county, with the perpetration of eight crimes as set forth in an equal number of separate counts involving, in the aggregate, alleged misappropriations of public funds, forgeries, and grand larcenies. Application by defendant for change of venue was granted, and the action was transferred to Snohomish county, and was there subsequently tried Before a jury. As to count III, which charged defendant with being an accessory to misappropriation of a particular sum of money by a former county treasurer of Clallam county, the prosecutor, at the beginning of the trial, announced that he would offer no proof, and upon that count the jury, at the direction of the court, returned a verdict of not guilty. As to counts IV, V, and VI, which involved grand larcenies of title to, and possession of, certain parcels of county real estate, the court sustained defendant's challenge to the sufficiency of the evidence, and the jury, at the direction of the court, returned a verdict of not guilty as to each of those three counts. The four remaining counts, namely, counts I, II, VII and VIII, were submitted for consideration and decision by the jury. Upon count II, which charged defendant with forgery in the first degree, in connection with a written application for the purchase of certain county real estate, the jury returned a verdict of not guilty. At the same time, the jury returned a verdict of guilty upon count I, which charged defendant with the crime of misappropriating public funds, committed by aiding and abetting the former county treasurer in the misappropriation of $225 of such funds to the use of the treasurer and of the defendant, and also returned a verdict of guilty upon counts VII and VIII, each of which charged defendant with the crime of forgery in the second degree, in that, as county commissioner, he, with intent to injure and defraud, had failed to enter upon the proper records certain orders, required by statute, relative to the sale of real property owned by the county. A motion, by defendant, for arrest of judgment, or, in the alternative, for new trial, was denied, and the court entered judgment of conviction and sentence. Defendant appealed.

At the times herein mentioned, appellant, Arnold Levy, was one of three county commissioners of Clallam county, and, as such, was serving his second term of office, which was to expire in January, 1941. At the same time, one Walter A. Baar, who had been a county officer of Clallam county for many years, was the duly elected county treasurer, holding office until January 9, 1939, on which date he was to be succeeded by one William Gilliam.

The facts which gave rise to the charge contained in count I, misappropriation of public funds, are as follows: In October, 1938, appellant cashed his personal check for $125 in the office of the county treasurer. Some time in December of that year, he sought to have another personal check cashed, at the same office, in the sum of $100, and was then informed by the cashier that his former check had never been deposited in bank, but was still in the treasurer's possession. At appellant's request, the first check was thereupon returned to him, and he then gave his check for $225, which represented the amount of his former check and the additional sum of $100 which he at that time received in cash. The latter check was undated, and was never deposited in the bank by Baar, the treasurer, during his term of office.

One of the statutory duties of the several boards of county commissioners, enjoined by Rem.Rev.Stat. § 4056, is to audit the accounts of all county officers having the care, management, collection, or disbursement of any money belonging to the county. On January 3, 1939, and again on January 5 of the same year, James E. Mansfield, one of the county commissioners then serving with appellant, having theretofore, as such commissioner, counted the cash in the treasurer's office, informed appellant that his check was in the treasurer's possession, and that it should be taken out.

When the county treasurer's office was opened on the morning of Monday, January 9, 1939, which was the day of expiration of Baar's term as treasurer, it was discovered that the safe in the cashier's compartment had been broken open and looted, and a number of checks and other papers which had been kept in the safe were found strewn upon the floor. Among them was appellant's check for $225. The looting of the safe precipitated an investigation of the affairs of Clallam county, and, as a result, a number of county officers were prosecuted for, and convicted of, crimes similar to those involved here. Count I represents one of the series of prosecutions. The issue upon that count was whether the transactions involving appellant's checks were ordinary bona fide transfers of negotiable instruments, or whether they amounted to unauthorized loans of public money by the treasurer to appellant.

Counts VII and VIII, although likewise resulting from the investigation that was made concerning the county's affairs, were wholly unrelated to the facts involved in count I. The essential facts as to count VII are as follows: One J. S. Kirschberg, appellant's second cousin, a resident of Los Angeles, California, had for some time been in the habit of making visits to Port Angeles, in Clallam county. While on one of such trips, he became interested in the possible purchase of certain taxtitle property owned by the county. Before leaving for his home, on that occasion, he instructed appellant to have the county treasurer put up for sale certain of such tracts of land, and to specify certain amounts as his, Kirschberg's, bids therefor. Appellant complied with Kirschberg's request, and the county treasurer, on September 8 and 9, 1937, signed Kirschberg's name on customary forms of application for such sales, inserting the proper descriptions and the amounts bid as specified by Kirschberg. The usual cash deposits accompanied the applications. The treasurer then submitted the applications to the board of county commissioners, and the board, acting through two of its commissioners, including appellant, formally approved them by written endorsement. The board, however, did not enter an order fixing a minimum price of sale or directing sale by the county treasurer, as required by Rem.Rev.Stat. (Sup.) § 11294. The failure to enter such orders is the basis of this particular charge. The treasurer nevertheless published notices of sale of the lands, in which notices the bids made by Kirschberg were specified as the minimum prices at which the lands would be sold. At the sale held by the treasurer, Kirschberg was represented by Nattinger & Levy, a local real estate firm of which appellant Levy was a member. Kirschberg's bids were the only bids made, and the lands were accordingly sold to him at the prices specified by him in his applications.

Count VIII was based on a factual situation somewhat similar to that in court VII. Prior to 1936, appellant, while holding the office of county commissioner, entered into a partnership with W. K. Nattinger, under the firm name of Nattinger & Levy, for the purpose of conducting a real estate and insurance business in Port Angeles. In the summer of 1937, appellant, together with Nattinger and a number of county officers, including Walter A. Baar, the county treasurer, formed an investment corporation, under the name of Port Angeles Securities Company. Appellant was made one of the directors of that company.

Immediately after its organization, the corporation entered into a written contract with Nattinger & Levy, the partnership, under the terms of which agreement the corporation was to have its principal place of business in the office of the partnership, and the latter was to act as agent of the corporation in the purchase and sale of real estate. For such services, Nattinger & Levy was to receive as compensation a certain percentage of stock of the corporation, and was also to receive regular commissions upon the sales of corporate property. Shortly thereafter, the board of directors, acting for the corporation, cocluded to purchase certain parcels of real estate in Port Angeles which the county had theretofore acquired through tax foreclosures, and authorized its agent, Nattinger & Levy, to bid up to a certain amount therefor. Prior to that time, it had been the custom and practice of the county, under the order and direction of the board of county commissioners, to have applications for the purchase of tax-title property filed in the office of the county auditor. Shortly Before the time involved in counts VII and VIII, the custom and practice were changed, and applications were thereafter required to be made to the county treasurer, Walter A. Baar, who, at that time, was one of the stockholders and directors of the new corporation.

On June 11, 1937, the corporation, through its secretary, W. K Nattinger, who was appellant's partner in the real estate and insurance business, filed with the county treasurer an application to purchase ...