State v. Breitenbach ( 1962 )

The opinion of the court was delivered by

Fatzer, J.:

These are appeals by the defendant from orders overruling his motion to abate the criminal action on a worthless check under G. S. 1949, 21-556, upon a showing that he has been discharged in bankruptcy. The facts are not in dispute.

On March 21, 1961, complaint was made in the county court of Ness County charging the defendant with giving a worthless check to the Ransom Farmer’s Coop Union in the amount of $563.50, drawn upon the Farmers and Merchants State Bank of Macksville. The defendant waived preliminary hearing, and was bound over to the district court for trial.

Following the filing of an information in the district court, the defendant filed his application to abate the action and for stay of proceedings, and alleged that on August 23, 1961, he was adjudged a bankrupt in the United States District Court for the District of Kansas, but that he had not as yet received his discharge in bankruptcy. The prayer was that the action be abated and that all proceedings be stayed in the district court of Ness County until the bankruptcy proceeding was determined.

On September 7, 1961, a hearing was had on the application to abate at which the defendant offered evidence that he had an account in the Macksville bank 30 days next prior to the giving of the check to the Ransom Coop; that he and his wife conducted a trucking operation in the name of the Breitenbach Trucking Company of Belpre consisting of 24 outfits: 9 tractors and 21 trailers; that other truckers owning tractors pulled some of his trailers; that he would sign about 100 blank checks a week which were used by his drivers for trucking expense, gasoline and to buy grain; that the check in question was given by one of his drivers to the Ransom Coop for grain; that his drivers bought grain all over the country, and that he did not know when or how many of the checks would be negotiated at any given time. He further testified that he did not know the check to the Ransom Coop would overdraw his account at the bank.

The district court found that the defendant had an account in the bank 30 days next prior to the giving of the check, and that it was given without intent to defraud the Ransom Coop. Accordingly, the court entered its order that the defendant had the right to abate the action by paying the check and the costs, and overruled the application to stay proceedings. Appeal No. 42,859 is from the orders overruling defendant’s motion for a new trial and to stay proceedings, and from that portion of the order where the court “ordered the defendant to abate said proceedings by paying said check upon determination by said court of the defendant’s right to abate as provided by G. S. 1949, 21-556.”

On November 15, 1961, the defendant received his discharge in bankruptcy, and thereafter filed a motion to dismiss the worthless-check action alleging his discharge in bankruptcy. Upon the hearing of the motion to dismiss, the district court found that it had entered its order on September 7, 1961, finding the defendant had shown the right to abate the action by paying the check and the costs pursuant to G. S. 1949, 21-556, and upon his failure to pay the check and costs, the motion to dismiss was overruled. The defendant filed a motion for a new trial, which was overruled, and appeal No. 43,017 is from that order. Upon application of the parties, the appeals were consolidated.

The sole question presented is whether a discharge in bankruptcy may be pleaded by an offender under the worthless-check statute (G. S. 1949, 21-554) as payment of the check in a proceeding authorized by G. S. 1949, 21-556, and thereby secure an abatement of the criminal action and obtain his discharge. Section 21-556 reads:

“That in any case where a prosecution is begun under this act, the defendant shall have a right, upon application made for that purpose before trial, to have said action abated by showing to the court or judge that he has had an account in said bank upon which said check or draft was drawn, thirty days next prior to the time said check or draft was delivered and that said check or draft was drawn upon said bank without intent to defraud the party receiving the same, and if the court shall so find, said action shall be abated and the defendant shall be discharged upon paying into court the amount of such check and the costs in said case.”

The defendant argues that since the district court found he had a right to abate the action, the showing of his discharge in bankruptcy of all his debts was the equivalent of payment of the check and such discharge may be pleaded as payment of the check in an abatement proceeding authorized by G. S. 1949, 21-556, and he relies upon In re Myers, 119 Kan. 270, 237 Pac. 1026. In support of his argument the defendant contends that since the Coop did not file its claim in the bankruptcy court and secure a determination that the check was a debt incurred to obtain property by false representations and was not dischargeable under Sec. 17a (2) of the Bankruptcy Act (11 U. S. C. A. § 35 [a] [2]), the discharge in bankruptcy constituted payment of the check. He asserts that had such a claim been made and the bankruptcy court determined that the check was the instrument by which grain was obtained by the false representations of the defendant, the debt represented by the check would not have been discharged and the district court would have been permitted to determine whether tibe defendant had the right to abate the check, and if it found that he did, to require payment of the check and costs as a prerequisite for his discharge from the criminal action.

We first consider the applicability of In re Myers, supra. That was an original proceeding in habeas corpus in which the petitioner sought release from the sheriff of Ellis County after being bound over to the district court for trial on a worthless-check charge. The abstracts and briefs on file in the State Library (Vol. 12, Briefs 119 Kan.) show the petitioner alleged that he was arrested for issuing a worthless check in Haskell County for apples purchased in Ellis County and that no crime had been committed in Ellis County; that prior to his arrest he had filed a voluntary petition in bankruptcy; that he had been adjudicated a bankrupt and had surrendered his assets to the court in bankruptcy; that the vendor-payees of the check had filed their claim with the referee in bankruptcy, which was allowed; that the referee in bankruptcy advised the petitioner not to pay the check and that payment of the same within four months prior to the adjudication of the bankrupt would result in a preference to the payees; that the allowance by the referee of a claim based on the check removed the check from the purview of the criminal statute and resulted in a bar of the action, and that a payment of $15 on the check destroyed the right to make a demand on the bank and also removed it from the prohibition of the statute. The transcript of the evidence taken at the preliminary hearing was attached to the petition and showed the petitioner attempted to abate the criminal action before the examining magistrate.

As the opinion indicates, the writ of habeas corpus was denied, it being held that although the check was given in Haskell County and mailed to the vendors in Ellis County, jurisdiction of the crime was in either county; that the fact the worthless check had been allowed by the referee in bankruptcy was not alone of vital consequence with respect to the criminal action; that the attempt to abate the criminal action before the examining magistrate was premature since jurisdiction of such a proceeding is vested in the district court, and the fact that bankruptcy proceedings had been precipitated did not bar the petitioner from exculpating himself under the worthless-check statute (21-556) “which sanctions an abatement and dismissal of the prosecution under certain conditions.”

While the opinion contains language that, and paragraph 5 of the syllabus so holds, a discharge in bankruptcy is the equivalent of payment of the defendant’s civil liability to the payee of the check and may be pleaded as payment of the check in a proceeding to abate the action, such a holding overlooks the mandatory requirements of 21-556 to abate the defendant’s criminal liability and secure his discharge from the criminal action. We have no quarrel with the holding that a discharge in bankruptcy is the equivalent of payment of the civil liabilities of all the bankrupt’s provable debts (11 U. S. C. A. § 35; G. S. 1949, 60-3601, 3602; Failor v. Wehe, 98 Kan. 325, 158 Pac. 74; Bank v. Hoffman, 102 Kan. 465, 171 Pac. 13). Rut the language that a discharge in bankruptcy may be pleaded as payment of a worthless check in a proceeding under 21-556 to abate a criminal action must be regarded as a mere gratuitous expression in the form of dicta on a point not an issue for decision, and we are compelled to hold that paragraph 5 of the syllabus and the corresponding portion of the opinion must be overruled.

The right to abate a criminal action afforded an offender under 21-556 is a right which he may or may not invoke. It is a privilege given by law to permit such an offender to correct an innocent mistake in issuing an insufficient fund check (State v. Morris, 190 Kan. 93, 372 P. 2d 282). If the right is invoked, the offender must bring himself clearly within the terms of the statute, that is, he must show to the satisfaction of the court or judge that he has complied with the three statutory requirements: first, that he had an account in the bank 30 days next prior to the giving of the check; second, that the check was given without intent to defraud the party receiving it, and third, if the court shall so find, “said action shall be abated and the defendant shall be discharged upon paying into court the amount of such check and the costs in said case” G. S. 1949, 21-556; State v. Morris, 190 Kan. 93, 372 P. 2d 282).

While grain may have been obtained from the Coop by the false representations of the defendant’s worthless check within the meaning of Sec. 17a (2) of the Bankruptcy Act (1 Collier on Bankruptcy, 14th Ed., § 17.16, p. 1612), that offense is not the crime the defendant is alleged to have committed (State v. Avery, 111 Kan. 588, 207 Pac. 838), and such a fact becomes immaterial where the defendant seeks to abate the criminal action under 21-556. The criminal prosecution is a matter in which the state alone is interested, and it is wholly unrelated to the proceedings in the bankruptcy court. It is elementary that there is a difference between a criminal action and a civil proceeding such as one in bankruptcy. Where the violation of a right admits of both a civil and criminal remedy, the right to prosecute the one is not merged in the other (G. S. 1949, 60-109). The state is not here seeking to enforce the Coop’s civil remedy. On the contrary, the defendant is seeking to abate the criminal action and obtain his discharge. That may be done only in the manner provided by the statute. While his discharge in bankruptcy is the equivalent of payment of his civil liabilities to his creditors, his payment of the check and costs to abate his criminal liability would not now constitute a preference of his creditors. Nor does the fact that the bankruptcy court made no determination that the debt represented by the check was not dis-chargeable under Sec. 17a (2) preclude the state from asserting that the defendant comply with the clear and unambiguous terms of the statute.

The defendant’s right to abate the action has been established, but he has only complied with the first two statutory requirements. Upon his compliance with the third requirement, that is, by forthwith paying into court the amount of the check and the costs of the case, the criminal action will be abated and he is entitled to his discharge, otherwise the case should proceed to trial upon the information.

Our examination of the record discloses no error and the judgment of the district court is affirmed.