This is a Warren W. Wolter

[David A. Szwak]

85 Wis.2d 353, 270 N.W.2d 230

Court of Appeals of Wisconsin.
STATE of Wisconsin, Plaintiff-Respondent,
v.
Warren W. WOLTER, Defendant-Appellant.

No. 77-655-CR.

Argued Aug. 16, 1978.
Decided Sept. 7, 1978.


Defendant was convicted in the Circuit Court, Milwaukee County, Christ T. Seraphim, J., of theft by contractor, and he appealed. The Court of Appeals, Moser, J., held that: (1) act of owner/prime contractor, as trustee of construction mortgage funds owed to material and labor suppliers, in using such funds for a purpose other than payment of those suppliers constituted offense of theft by contractor; (2) refusal to deliver any money which is in one's possession or custody as a trustee, upon demand of person entitled to receive it, is prima facie evidence of intent to convert it to his own use within meaning of statutes governing theft by contractor; (3) trial court properly instructed jury that a demand for and a refusal to pay trust monies to those entitled to receive them was prima facie evidence of an intent to convert; (4) issue respecting alleged judicial misconduct could not be considered on appeal in absence of timely objections in trial court, and (5) no jurisdiction existed to determine issue whether trial court erred in denying motion to modify sentence because order for restitution conflicted with exclusive jurisdiction of federal bankruptcy court.
Affirmed.


MOSER, Judge.
The five issues presented on appeal are:
1. Were secs. 289.02(5) and 943.20, Stats., properly applied to Wolter's acts?
2. Did the state present evidence sufficient to meet its burden of proof with regard to the intent required by sec. 943.20(1)(b), Stats.?
3. Did the trial court properly instruct the jury that a demand for and a refusal to pay trust monies to those entitled to receive them is Prima facie evidence of an intent to convert?
4. Did the trial court commit prejudicial errors throughout the trial?
5. Did the trial court's order for restitution conflict with a federal discharge in bankruptcy?
Wolter and his wife were the sole owners and stockholders of Warjo Construction, Inc. (Warjo) and were its president and secretary respectively. Wolter was also its chief operating officer. Warjo was primarily engaged in purchasing and developing land, arranging for financing the construction of various units, acting as general contractor, and selling the units upon completion.
In 1975, Warjo purchased land on Granville Road in Milwaukee, with plans to develop a 14 unit apartment project. Wolter went to Heritage Savings & Loan Association (Heritage), seeking a construction loan for this project. On December 30, 1975, a construction loan agreement for the Granville Road project was executed with the loan amount set at $259,000. A note, secured by a construction mortgage with Heritage as mortgagee, was signed by Wolter and his wife as officers of the corporation and also as personal guarantors.
The loan agreement provided that the proceeds of the construction loan were to be used solely for the Granville *361 Road project. As certain stages of construction were completed and after inspection of the site by Heritage personnel, the corporation would receive a draw from Heritage to pay subcontractors and materialmen.
**235 Subcontracts were left by Warjo and construction was begun. Among the subcontractors were: EZ Roofers Company (roofing), General Lumber and Supply Company (building materials), Henry Marohl (excavation), Stolze Masonry, Inc. (masonry) and Carl Zeeb (carpentry).
Between February and July 14, 1976, Wolter requested and received six draws from Heritage totalling approximately $118,000. This included money to pay the subcontractors and materialmen on the Granville Road project. The checks were received by Warjo and, at Wolter's direction, were deposited in the Warjo checking account. Wolter signed all checks disbursing this money.
Among the subcontractors and materialmen who were not paid are: EZ Roofers $4,187.50; General Lumber and Supply $33,134.98 (with discount $27,169.74); Henry Marohl $1,599.50; Stolze Masonry $18,437.70; and Carl Zeeb $16,000, totalling some $67,000.
Heritage did not authorize the use of draw monies for any purpose other than paying the subcontractors and materialmen on the Granville Road project. The subcontractors and materialmen did not authorize the payment of draw monies on their behalf to anyone else. All repeatedly and unsuccessfully demanded payment from Wolter. Other subcontractors were also not paid. The draw monies were paid to corporate creditors, but not necessarily for the Granville Road project. No further draws were made after July 14, 1976 because construction work ceased. At the time of trial $80,000 remained in the draw account at Heritage. The cost of completion of the project is estimated to be in excess of $200,000.
*362 On January 6, 1977 a criminal complaint was filed charging the defendant with ten counts of theft by contractor. After a waiver of the preliminary examination, an information charging one count of theft by contractor was filed. Wolter entered a plea of not guilty. At the conclusion of the trial, the jury found Wolter guilty as charged. It found the value of the stolen property to be $65,200.


Applicability of sec. 943.20(1)(b)

[1] Sec. 289.02(5) is a criminal statute,[FN1] creating the crime of theft by contractor punishable under the provisions of sec. 943.20, Stats. [FN2] Sec. 289.02(5), Stats., also creates civil liability.[FN3] The two statutes are In pari materia and should be read and harmonized where it is possible to do so. [FN4] It is the duty of the court to construe these statutes, making both operative.[FN5]

FN1. Burmeister Woodwork v. Friedel, 65 Wis.2d 293, 300-02, 222 N.W.2d 647 (1974).


FN2. State v. Halverson, 32 Wis.2d 503, 508, 145 N.W.2d 739 (1966).


FN3. Burmeister, supra, 65 Wis.2d at 301, 222 N.W.2d 647.


FN4. In the Matter of the Estate of Walker, 75 Wis.2d 93, 102, 248 N.W.2d 410 (1977); State v. Halverson, supra, 32 Wis.2d at 515, 145 N.W.2d 739.


FN5. State v. Klein, 25 Wis.2d 394, 404, 130 N.W.2d 816 (1964).


[2] Aside from the differing burdens of proof in the civil and criminal actions for theft by contract, the only difference between them is the additional element of wrongful intent required in the criminal action.[FN6]

FN6. Burmeister, supra, 65 Wis.2d at 301, 222 N.W.2d 647; Pauly v. Keebler, 175 Wis. 428, 436, 185 N.W. 554 (1921).


Wolter argues that since he is an owner/prime contractor, sec. 943.20(1)(b), Stats., is inapplicable to him. He asserts that as the owner described in that section of the statute he cannot steal from himself. He concludes *363 that the only remedy against an owner/prime contractor is the civil remedy under sec. 289.02(5), Stats.
[3] The failure of this argument is that sec. 289.02(5), Stats. not sec. 943.20, Stats., creates the crime of theft by contract. Sec. 943.20, Stats., is only the conduit through which the crime of theft by contract becomes operative in criminal proceeding pursuant**236 to sec. 289.02(5), Stats. These statutes must be harmonized.[FN7]

FN7. Halverson, supra, 32 Wis.2d at 515, 145 N.W.2d 739.


[4] Mortgage money was given by Heritage to Wolter, as prime contractor and president of Warjo, only for improvements to the Granville land to pay for labor and materials until all claims were paid. The trial record unequivocally demonstrates that the Heritage mortgage money was used for other corporate purposes, such as office rent, utilities, salaries, interest due on other corporate obligations and real estate taxes on other corporate properties. The jury found that $65,200 in claims for materials and labor were outstanding at the time of trial. Those claims were the claims of EZ Roofers, General Lumber and Supply, Henry Marohl, Stolze Masonry, and Carl Zeeb. The use of the Heritage mortgage funds by Wolter, the president of Warjo and the owner/prime contractor, for any other purpose until all claims for materials and labor had been paid is theft by contractor.
Wolter next maintains that the application of sec. 943.20(1)(b), Stats., in this case is not only erroneous but unconstitutional for vagueness. This statute refers specifically to a trustee, having possession or custody of money, who intentionally uses such money without the owner's consent, contrary to his authority, and with intent to convert to his own use, being subject to the criminal sanctions. Wolter claims the application of this statute in this case is unconstitutionally vague as it provides*364 that Wolter, “an ownerâ€

[David A. Szwak]

69. Heritage Savings Bank v. Richardson,
91 Wis.2d 852, 284 N.W.2d 122, 1979 WL 30612, Unpublished Disposition,, Wis.App., August 27, 1979

...CEMENT COMPANY, and GENERAL LUMBER & SUPPLY CO., INC., a corporation, Defendants, ZEEB BUILDERS, INC., Defendant and Third-Party Plaintiff-Appellant, WARREN W. WOLTER, Third-Party Defendant, WARJO CONSTRUCTION, INC., Defendant and Third-Party Defendant. 79-089. Aug. 27, 1979. Circuit Court, Milwaukee County...

...construction mortgage on a project known as the Granville project. A judgment of foreclosure was entered in this action. Subsequently, Warren Wolter, an owner and stockholder of Warjo Construction, Inc. was convicted of theft by contractor due to his use of Heritage...