PEOPLE v. KNOTT

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District Court of Appeal, Third District, California.

PEOPLE v. KNOTT.

Cr. 1688

Decided: October 03, 1939

J. Oscar Goldstein and Burton J. Goldstein, both of Chico, for appellant. Earl Warren, Atty. Gen., and J.Q. Brown, Deputy Atty. Gen., for the People.

Two indictments for embezzlement under section 504 of the Penal Code were returned against the defendant as auditor of Butte county. The first indictment charged her with embezzling $625, coming into her possession and under her control by virtue of her trust as auditor. This money was drawn from a special highway bond fund in the actual possession of the county treasurer, by means of a warrant wrongfully drawn by the defendant in favor of the Chico branch of the Bank of America for the purported payment of thirty-seven interest-bearing coupons of highway bonds, which had been previously paid. That sum was credited to the private bank account of the defendant, but was subsequently refunded to the county treasury. The second indictment which was couched in two counts charged the defendant with embezzling separate sums of $110 and $270 alleged to have come into her possession and under her control by virtue of her trust as auditor. The last-mentioned sums were obtained from the county treasury by means of warrants drawn by the defendant in favor of First National Bank of Oroville and Anglo California National Bank, respectively, in payment of two claims for those amounts which had been previously approved and allowed by the board of supervisors of Butte county, for alleged expenses incurred by the county auditor in installing in the auditor's office a double-entry bookkeeping system. These last-mentioned sums were credited to the defendant's private bank account and appropriated by her to her own use. The claims which were presented to and allowed by the board of supervisors were false, since the expense had not been incurred by the auditor, and no such system was installed in her office. The defendant failed to take the witness stand in her own behalf.

The cases growing out of the two indictments were consolidated for trial. The defendant was convicted by a jury of all the charges against her. Motions for directed verdicts and in arrest of judgment were denied. From the order denying a new trial and from the judgment of conviction this appeal was perfected.

We are persuaded there is a fatal variance between the allegations of the indictments and the evidence upon which the defendant was convicted. She may have been guilty of procuring from the county treasury the money involved in the last indictment by means of presenting false claims to the board of supervisors contrary to the provisions of section 72 of the Penal Code, or she may have been guilty of grand theft under the provisions of section 484 of that code, but, under the uncontradicted evidence of this case, as auditor of Butte county, she was not guilty of embezzling money in her possession or under her control by virtue of her trust. Clearly she was not entrusted as auditor of Butte county with any of the money she was charged with appropriating to her own use. The special highway bond fund from which she procured the $625 involved in the first indictment, and the general county fund from which she procured the sums of money involved in the second indictment, were entrusted by law to, and in the actual possession of, the county treasurer. Neither of these funds was in the possession or custody of the auditor by virtue of her trust or otherwise.

Nor do we think either of these funds was under her control by virtue of her trust as auditor so as to constitute embezzlement in contemplation of the language of section 504 in that regard. That section provides: ‘Every officer of this state, or of any county, city, city and county, or other municipal corporation or subdivision thereof, and every deputy, clerk, or servant of any such officer, and every officer, director, trustee, clerk, servant, or agent of any association, society, or corporation (public or private), who fraudulently appropriates to any use or purpose not in the due and lawful execution of his trust, any property which he has in his possession or under his control by virtue of his trust, or secretes it with a fraudulent intent to appropriate it to such use or purpose, is guilty of embezzlement.”

We assume the preceding section refers only to the legal control of money or property entrusted by law to the officers and their deputies and agents which are mentioned therein. A county auditor is not vested by law with the control over the public funds of a county. The powers of an auditor, as defined by the Political Code, are purely clerical or ministerial with respect to the bookkeeping process of checking on the legality of claims presented against the public funds in the actual custody and control of the county treasurer. With respect to such claims as were involved in the second indictment, the auditor is authorized to draw warrants upon the treasurer therefor only after they have been “legally examined, allowed, and ordered paid by the board of supervisors”. Sec. 4091, Pol.Code. With respect to the $625 involved in the first indictment, it is only by virtue of the law which authorized the issuing of the highway bonds and the payment of interest coupons thereof, that the auditor was empowered to draw warrants upon the treasurer for such claims. In no sense is the auditor a trustee of these public funds in the custody of the county treasurer. We are impelled to hold that such mere clerical or ministerial authority for an auditor to draw warrants upon the treasurer for valid claims previously allowed and ordered to be paid by a board of supervisors does not constitute either such possession or control of public funds in the exclusive custody of the county treasurer as is contemplated by section 504 of the Penal Code so as to constitute embezzlement under the circumstances of this case.

In the case of Ex parte Huston, 27 Idaho 231, 147 P. 1064, 1066, cited by the appellant in this case, the petitioner, after conviction by a jury, was released from custody. The petitioner, as state auditor, was charged with the wrongful appropriation of a sum of money under section 6975 of the Revised Codes of Idaho, which provides in part:

“Each officer of this State, or any county, city, town, or district of this State, and every other person charged with the receipt, safe keeping, transfer, or disbursement of public moneys, who either:

“1. Without authority of law, appropriates the same or any portion thereof to his own use, or to the use of another; *.” is guilty of a felony punishable by imprisonment in the state prison, and is disqualified from holding any office in that state.

It is true that the preceding statute is aimed at the appropriation of public money by an officer who is charged with the “receipt, safe keeping, transfer, or disbursement” thereof, as distinguished from an officer having such public funds “in his possession, or under his control by virtue of his trust”, as provided by section 504 of the Penal Code of this state. But the language of the Idaho court in the Huston case, with respect to the limitation of authority of an auditor to control or appropriate public funds in the custody of a treasurer, appears to be applicable to this case. The Idaho court said in that regard:

“In our opinion, section 6975, Rev.Codes, supra, was aimed at the crime of embezzlement, and against a particular class of persons who fraudulently appropriate to their own use, or to the use of others, not in the due and lawful execution of their trust, any property which comes into their possession or under their control by virtue of the official position which they hold, or in violation of a trust. Under the law of this state, a state auditor does not come within the class of persons against whom said section is aimed, for the reason that he is not charged, under the statute, with the receipt, safe-keeping, or disbursement of public moneys. He is but one of several whose combined acts are absolutely necessary to ultimately bring about the disbursement of public moneys. *

“When penalties are directed against a particular class, a description of the class and of the defendant as coming therein, are essential elements of the crime and must be charged and proved. *

“The statute auditor cannot legally draw a warrant in favor of a claimant, such as the one described in the indictment, except as authorized and directed so to do by the state board of examiners. *

“The state treasurer is not only authorized under the law, but it is made his duty, as such officer, to refuse the payment of a state warrant drawn by the state auditor unless he is satisfied that it is a proper and legal charge against the state. * A warrant drawn by the state auditor is but prima facie, and not conclusive evidence of the validity of the allowed claim, and unless there is authority of law for the payment of such claim, the treasurer may refuse, and indeed it is his duty to refuse, to pay the warrant, even if funds are appropriated. *

“An officer not charged by law to collect, and who has no right to the public money, cannot be convicted of embezzling money received under color of his office, though he falsely represented that he was entitled by virtue of his office to receive it.”

Likewise, the statutes of California specifically limit the authority of a county auditor with respect to the payment of valid claims against either a general or special fund in the custody of the treasurer. The auditor has no authority to collect public money from the treasurer. In the language of the Huston case, supra, “he is but one of several whose combined acts are absolutely necessary to ultimately bring about the disbursement of public moneys”. It is only his clerical or ministerial acts, in conjunction with the board of supervisors or other officers which authorizes the owner of the claim, and not the auditor, to gain “possession or control” of the funds. If he fraudulently cashes a warrant without the authority of the owner, he does not obtain possession or control of the money by virtue of his trust. If he is authorized by the owner of the warrant to collect the warrant and pay it to the owner, he does so as the agent of the owner, and not by virtue of his trust. Under such circumstances he would not be guilty of embezzlement for misappropriation of the funds under section 504 of the Penal Code.

In the case of State v. Raby, 31 Wash. 111, 71 P. 771, 772, relied on by the attorney-general, Raby, as auditor of Whitman county, was charged and convicted of larceny of a warrant for $1,753 belonging to American Bridge Company. Section 7119 of 2 Ballinger's Annotated Codes & Statutes of Washington, under which he was indicted, reads as follows: “If any agent, clerk, officer, servant or person to whom any money or other property shall be intrusted, with or without hire, shall fraudulently convert to his own use, or shall take and secrete the same with intent fraudulently to convert the same to his own use, or shall fail to account to the person so intrusting it to him, he shall be deemed guilty of larceny, *.”

The preceding Washington section of the code is similar to section 484 of the Penal Code of California, under which the defendant in this case might have been successfully prosecuted.

In the Washington case the warrant belonging to American Bridge Company was entrusted by it to the auditor. In affirming the judgment of conviction the court said: “He therefore had the warrant rightfully in his custody, and also, by operation of law, held it as the agent of the owner.”

Raby was charged and convicted of appropriating to his own use a warrant entrusted to him as agent. He was not charged or convicted of embezzling public funds in his possession or under his control by virtue of his trust. We are of the opinion that case is not authority for upholding the judgment in the present case.

In the case of People v. Tennant, 32 Cal.App.2d 1, 88 P.2d 937, which is also cited by the respondent, a judgment of conviction of the defendant of three counts of an indictment was sustained. One count was for grand theft under section 484 of the Penal Code. The other two counts were for appropriation of property by an officer and agent of Oakdale Irrigation District under section 504 of the Penal Code. The evidence shows that as an agent of the irrigation district, the defendant was authorized to sell some land belonging to it. He sold the land at $35 an acre and received as part of the purchase price some lumber to replace a barn which was to be reserved from the sale. The defendant then appropriated the lumber to his own use contrary to his agency and trust. Under such circumstances the lumber was in his possession and under his control by virtue of his agency and trust. He therefore violated the provisions of section 504, and he was also convicted of grand theft. The Tennant case is therefore not authority in support of the respondent's contention in this case.

In view of our conclusion that the appellant is not guilty of embezzlement under section 504 of the Penal Code, under the circumstances of this case, and that there is a fatal variance between the allegations of the indictments and the proof of the alleged crime, which was adduced at the trial, it is unnecessary for us to pass upon the further charge that the trial court erred in the admission of evidence and in misdirecting the jury in its charge.

The judgment is reversed; the defendant is discharged from custody and the bail bond exonerated.

Mr. Acting Presiding Justice THOMPSON delivered the opinion of the court.

I concur: TUTTLE, J.

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