State v. Lowenberg

• Decision Date: 24 June 1932
• Docket Number: No. 40487.,40487.
• Citation: 216 Iowa 222,243 N.W. 538
• Parties: STATE v. LOWENBERG.
• Court: Iowa Supreme Court

216 Iowa 222

243 N.W. 538

STATE

v.LOWENBERG.

No. 40487.

Supreme Court of Iowa.

June 24, 1932.

Appeal from District Court, Polk County; Lester L. Thompson, Judge.

Defendant appeals from a judgment on a conviction of conspiracy. He was jointly indicted with one Blackledge, and a joint demurrer to the indictment was overruled. The demurrer is not urged on this appeal. The defendants were tried separately. See State v. Blackledge (Iowa) 243 N. W. 534, filed at the current term.

Affirmed.

GRIMM, J., dissenting.Parsons & Mills and John C. De Mar, both of Des Moines, and Lloyd L. Duke, of Ottumwa, for appellant.

John Fletcher, Atty. Gen., Carl S. Missildine, Co. Atty., and Alex M. Miller, Asst. Co. Atty., both of Des Moines, for the State.

STEVENS, J.

The indictment charges the defendant with the crime of conspiracy to defraud the Ancient Order of United Workmen. He was from 1920 to 1928 grand master of the order. The evidence relied upon to establish his guilt is wholly circumstantial. Four separate and distinct transactions in which considerable sums of money were obtained from the order are proven in detail. The alleged connection of the defendant, Lowenberg, therewith is relied upon by the state to establish the crime charged in the indictment. The defendant, by virtue of his office as grand master, was a member of the loan committee of the order whose funds were loaned upon real estate in the several counties of this state. The overt act charged in the indictment involved a loan upon a 200-acre tract of land located in Madison county. The facts established by direct testimony are not in dispute. In each of the series of transactions, with possibly one exception, Blackledge, jointly indicted with Lowenberg, agreed to purchase the land upon which loans were subsequently made, and for a small consideration procured some available person to accept a conveyance of the title to sign applications for loans and to execute notes and mortgages to the order.

In the transaction charged in the indictment, the purchase price of the land was $11,000. Title was taken in the name of one C. D. Jones to whom Donohue, who was operating with Blackledge, paid $25 for his services. A loan of $15,000 upon the application of Jones was made upon this tract. A warrant for $14,690 was drawn upon the funds of the order payable to Jones. The proceeds of the warrant were paid upon what appears to have been the forged indorsement of Jones as follows: $11,000 to the seller and $3,690 to Blackledge. Nothing, at the time of the trial below, had been paid upon this loan. The evidence shows that the land was worth approximately the purchase price.

Prior to the consummation of the Jones transaction, three other loans of similar character were made. One Moffett became the purchaser of a large tract of land in Benton county. According to the testimony, the tract was worth from $11,000 to $15,000. The order loaned Moffett $20,000 thereon. This loan was procured for the borrower by Blackledge. The purchase price of $11,000 was paid from the proceeds of a warrant for $13,000 drawn on the order and payable to Moffett. A warrant was also drawn for $6,600, which was finally returned to the order. It is claimed in connection with this loan that Blackledge had entered into a contract with Moffett and one Streeter to sell them a number of separate tracts of land. A contract of such import dated July 13, 1926, was introduced in evidence. The loan of $20,000 on the Benton county land was made in September, 1926, following. The testimony tends to show that the warrant for $6,600 was turned back to the order for the purpose of paying delinquent interest upon loans made thereby upon land described in the contract between Blackledge and Moffett. The delinquent interest appears, however, to have been canceled and the proceeds of the warrant were turned over to the order. Out of the $13,000 received by Moffett, the purchase price of the land was paid, and a portion of the rest of it used in perfecting the title to the land. Of the balance, $425 was paid to Lowenberg and $275 to Blackledge. This transaction was concluded by an attorney employed by Moffett at Vinton. The attorney testified that Blackledge claimed that $1,000 of the proceeds of the loan was due him for services rendered to Moffett in its procurement. The attorney declined to pay the amount to him, but an order signed by Moffett therefor appears in the record. It is claimed by the defendant that the $425 received by him was for the purpose of paying a loan previously made to Blackledge of that sum. A check drawn by defendant payable to Blackledge for $400 was introduced in evidence. The word “loan” appears to have been written in the lower left-hand corner of the check. The defendant further testified that at the time of making the loan he gave Blackledge $25 in cash.

The next transaction shown in the evidence is of a similar character and concerned a tract of land in Van Buren county. The purchaser designated in this case was Sam Du Vall. The purchase price of the land, which was sold by a referee in partition, was $8,745. Du Vall was procured as a purchaser by Blackledge and was paid $300 for his services. Du Vall moved upon the land, but did not stay. The loan made upon this land was $11,000. Du Vall never saw the warrant for $11,000, although it purported to have been indorsed by him. The purchase price was paid by Blackledge from the proceeds of the loan.

The remaining loan referred to in the testimony was made upon land in Union county. The loan papers were executed in this case by one Morris procured by Blackledge for that purpose. The purchase price of this land was $14,652.40 and the loan $17,800. The proceeds of the loan were used first to pay a mortgage of $10,000 on the land to the National Life Insurance Company. The $10,000 was paid by Lowenberg to the Central State Bank which held the mortgage for payment. Blackledge, a man by the name of Rex, and J. V. Richardson, who was interested in the transaction, were all present at the bank when this payment was made. Blackledge delivered to Richardson a warrant drawn on the order for $6,434, made payable to, and purporting to have been indorsed by Morris to, Richardson. This sum was largely in excess of the amount due Richardson. The transaction was not finally consummated at the Central State Bank but at the Iowa National Bank, to which Blackledge and Richardson went for that purpose. The warrant was cashed, Richardson paid the amount due him, and the balance, approximating $3,000, was appropriated by Blackledge. The attorney for the seller testified that Blackledge asked him if he would take a check from the lender for a sum in excess of the purchase price and give him (Blackledge) a check for the difference. This the attorney refused to do.

The method of making loans by the order appears to be for one or more members of the loan committee to inspect the land upon which an application for a loan has been received. Each of the tracts upon which the loans referred to were made were inspected by the defendant in company with Blackledge. The Benton county land, upon which the loan was made to Moffett, was perhaps also inspected by one other member of the loan committee. In some instances the land was appraised by disinterested parties. The usual and ordinary course of dealing, so far as the records of the order are shown in the evidence, was followed in each of the transactions in question. Each of the loans was grossly excessive, and did not comply with the requirement of section 8829 of the Code 1924, which requires that loans be made only in an amount not to exceed one-half of the value of the land.

[1] Blackledge was a real estate agent and broker residing at Keosauqua. He was a member of the order, but the defendant became personally acquainted with him after he became grand master. Except the check for $400 forwarded to the defendant by the Vinton attorney, the record is utterly barren of any direct evidence tending to show that the defendant received any portion of the sums fraudulently taken and appropriated by Blackledge. That appellant sought by fraud and connivance to dissipate the funds of the order, or any portion thereof, solely for the benefit of Blackledge, is hardly believable. In the first place, an honest man would not have done so, and a dishonest one would have been induced to such action only for self-aggrandizement or for personal advantage in some form or other. The state was not required by direct evidence to prove that the defendant participated in the appropriation of the several...