People v. Sawhill

132 N.E. 477, 299 Ill. 393
CourtIllinois Supreme Court
DecidedOctober 22, 1921
DocketNo. 13993
StatusPublished
Cited by36 cases

This text of 132 N.E. 477 (People v. Sawhill) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People v. Sawhill, 132 N.E. 477, 299 Ill. 393 (Ill. 1921).

Opinion

Mr. Justice Carter

delivered the opinion of the court:

Plaintiff in error, James E. Sawhill, was indicted in the- circuit court of Woodford county at the September term, 1920, certain counts of the indictment charging him with the confidence game and others with false pretenses. On the trial of the case he was found guilty under two counts charging him with the confidence game and he was sentenced to the penitentiary. This writ of error was sued out to review the proceedings.

The indictment contained eight counts. The first, third and fourth were quashed by the trial court. Not long after the evidence for the People had been introduced, mainly in support of the second count of the indictment, charging false pretenses, and the sixth and eighth, charging the confidence game, on order of court counsel for the State were required to elect as to what counts they would proceed under, and they elected to proceed under the sixth and eighth counts, charging the confidence game.

James E. Sawhill, the plaintiff in error, had been engaged for years as a bond salesman and broker in Chicago and other places. He came to Peoria, Illinois, it seems, in the spring of 1917 and worked for a company which had opened a brokerage office there under the name of Henderson & Co. This company apparently had but small success, and shortly after plaintiff in error entered its employment Henderson & Co. went out of business and the enterprise was taken over by plaintiff in error and conducted by him under the name of Corn Belt Investment Company, the company not being incorporated. Plaintiff in error was the sole owner. In the beginning he had little or no capital. He secured the furniture and fixtures of the Henderson & Co. concern, but there was no definite proof in the record as to what this furniture was worth. It was, as we understand the record, all or partially covered at that time by a chattel mortgage given to the landlord to secure the rent. The evidence tends to show that plaintiff in error paid for this furniture and equipment and also that he built up a fairly successful brokerage business in the sale of stocks and bonds. He had his office well equipped with employees and furniture for that business, buying and selling high-class securities and dealing with good banks and other reliable financial concerns. In November, 1918, he organized a Delaware corporation under the name of “The Corn Bc't Investment Company,” which was also licensed to do business in Illinois. Its capital stock was divided into $50,000 preferred stock and $100,000 common stock. In organizing this new company plaintiff in error took to himself the common stock of $100,000 for his interest, “good will” and “going value” in the business theretofore conducted by him. Before September 1, 1919, the capital stock was increased from $150,000 to $300,000, all of the increase being preferred stock, and plaintiff in error was chosen president and manager of this new corporation. About that time he became acquainted with John A. Harper, who was assistant cashier in a bank at Eureka, Woodford county, Illinois. He interested Harper in helping to sell the stock of the new Corn Belt Investment Company and securities and in raising money among his neighbors in Eureka and the farmers in that vicinity. Plaintiff in error and Harper together interested Frank O. Jury, who was a farmer in that vicinity, Pierce A. Felter, a retired farmer who had formerly been county treasurer of Woodford county, and George M. Hal-lam, a farmer and manager of a grain elevator, in the business of the Corn Belt Investment Company. Plaintiff in error and Harper first talked with Hallam about buying oil stock, and arrangements were made by the former to meet Hallam at a hotel in Chicago and go with him to investigate as to buying oil stock. In accordance with this agreement plaintiff in error met Hallam and went with him to the business offices of Babcock-Ruston & Co., where they met president Barnes of that company, who was also president of the Globe Oil Company. Hallam, at plaintiff in error’s suggestion, went to visit the oil properties in Oklahoma and plaintiff in error paid the expenses, apparently through the Corn Belt Investment Company. On his return Hallam bought 1500 shares of oil stock through plaintiff in error for $1875. Harper knew of this trip and of the investment. Jury became a stockholder in the Com Belt Investment Company early in 1919. He and Hallam and Felter were elected directors of that company on August 25, 1919. Jury appears to have been present at this meeting and to have taken part in the proceedings. Felter and Hallam were not present at the meeting but were shortly thereafter personally notified by Harper of their election, and Harper gave Felter $2500 worth of the common stock of the Com Belt Investment Company, Felter testifying that Harper told him it was necessary to own stock in order to be a director. At this stockholders’ meeting on August 25 a resolution was passed that the corporation should issue its notes up to $50,000 and discount them in order to obtain ready cash for use in the business. The notes were not dated but were then and there prepared for the signatures and for the endorsements of the directors. Plaintiff in error and Jury endorsed all of them at this meeting. About August 15, 1919, Hallam had been induced by the persuasions of Harper and plaintiff in error to sign a bond to the Central National Bank of Peoria, with plaintiff in error and July, to secure a credit of $25,000 for the corporation. After the meeting of August 25 Felter was informed by Harper of the resolution to borrow $50,000 on the corporation’s notes, to be endorsed by all the directors, and Harper also explained to Felter that they needed his signature on the bond for $25,000, heretofore referred to, and got from Felter a statement of his financial condition. Felter signed the notes for the aggregate of $50,000 on August 25, or a day or two later, and also signed the bond for $25,000. Shortly thereafter he became dissatisfied with the arrangements that had been made and insisted on not continuing as a guarantor of the Corn Belt Investment Company’s credit. The record tends to show that four of the notes which made up the $50,000 had been discounted by the Corn Belt Investment Company, the company receiving therefor about $15,000. At Felter’s insistence the balance of the $50,000 in notes, amounting to $35,000, was surrendered to him and the notes were torn but not entirely destroyed. They were introduced in evidence in a mutilated condition on the trial of plaintiff in error. About the same time that these notes were destroyed Felter went to the Central National Bank of Peoria, to which the security bond of $25,000 had been given, and insisted that no further credit should be given to the Corn Belt Investment Company by said bank because of his signature on the bond. At that time it would appear from the record that $11,000 security had been granted by said bank to the company based on the bond.

Hallam testified that some time before he signed the $50,000 in notes and the bond for $25,000 he had been shown a financial statement of the Com Belt Investment Company by Harper. There is a sharp dispute in the briefs, and the evidence in the record is not clear and definite, as to the statement that was shown to Hallam. There can be no question that prior to August 26, 1919, there was a financial statement of-the company in existence. Such a statement, the evidence tends to show, was based largely on the monthly trial balances of the company, which were prepared at the end of each month.

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Bluebook (online)
132 N.E. 477, 299 Ill. 393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-v-sawhill-ill-1921.