State v. . Klingman

ALLEN, J., dissenting; HOKE, J., concurs. The defendant is indicted and convicted of embezzlement as manager of the Greensboro branch of the J. I. Case Threshing Machine Company. In June, 1914, he was informed that his connection *Page 1007 with the company would cease on 1 July, 1914. He thereupon went to Racine, Wis., and in an interview with one of the officials at headquarters stated that while he did not consider himself an embezzler, he had sold property belonging to the company and had used the money to about the amount of $5,000. He promised on his return to Greensboro to furnish a statement of the property sold and the proceeds used. Instead of returning, he went to Seattle, Wash., where he changed his name and let his hair and beard grow, but was located and arrested some fourteen months later and brought back to this State, at great expense, upon requisition papers issued upon this indictment. The indictment alleges the embezzlement of two checks, one for $55.85 and one for $1,050, which had been received by him as manager for said J. I. Case Threshing Machine Company from the sale of an automobile to Dr. E. C. Brasington. It is in evidence that these checks were handed by Brasington to H. C. Bowden, a traveling salesman of the company, who indorsed and turned them over to the defendant, who indorsed the $55.85 check and deposited it to his personal account in bank, and afterwards it was drawn out by him on his personal checks. The $1,050 check was cashed by him and used, together with other money, in the purchase of a check on New York for $1,366, which the defendant remitted to the J. I. Case Threshing Machine Company, requesting that $1,275.83 thereof should be credited on the sale of an automobile previously sold to one T. L. Bland, which he had reported sold for cash. The sale of the automobile (19587) to Brasington was (949) never reported by the defendant to the home office at Racine and no remittance covering the proceeds of said sale was ever received by said company, but it was reported by him to be on hand at Lancaster, S.C., in July, 1914, at the time the defendant was dismissed from the service of the company. The contention of the defendant is that inasmuch as the J. I. Case Threshing Machine Company received out of the money arising from the Brasington sale a check for $1,050, that therefore there had been no embezzlement. There had been a previous embezzlement by the defendant in not remitting the proceeds of the sale of the machine to Bland, and when this second embezzlement was made in the sale of another machine to Brasington the fact that the defendant used part of the proceeds in paying to the machine company what he had received on the Bland machine did not condone the embezzlement of the money received for the machine sold to Brasington. The defendant simply committed two embezzlements instead of one, and used the proceeds of the latter embezzlement to make good, without the knowledge or consent of his principal, the first embezzlement of the proceeds of the sale to Bland. *Page 1008 The plea of the defendant (as was said by this Court in regard to a defense pleaded by this writer for the defendant in Spilman v. NavigationCo., 74 N.C. 678) "is worth preserving for its amusing fallacy." The plea in this case has its parallel in the man who purchased a hat of a merchant and then suggested he would like to exchange it for a pair of shoes. As he was leaving the store the merchant demanded payment for the shoes. The buyer responded, "I paid you the hat for them." The merchant said, "But you have not paid for the hat," to which the reply was, "But you have your hat over there behind the counter." No ingenuity can change the fact that the defendant sold the machine to Brasington as agent for the prosecuting company, that it was the defendant's duty to have remitted the proceeds in payment thereof, but that instead he used $1,050 of it in part purchase of a check to pay his former defalcation of the proceeds of the machine sold to Bland, and that the $55.85 has been checked out by the defendant for his own purposes. The $1,050 of the proceeds of the machine sold to Brasington thus included in the draft sent forward to make good the defalcation in the proceeds of the Bland machine is none the less an embezzlement. S. v.Foust, 114 N.C. 842. It was used for the personal purposes and benefit of the defendant to screen himself from punishment on that defalcation, and the $55.85 was also drawn out for his own purposes. (950) Revisal, 3406, denounces a fraudulent misappropriation or misapplication. That statute says "shall fraudulently . . . misapply," and it does not matter how it was done or for whose benefit.S. v. Foust, 114 N.C. 842. "The using by a clerk of money of his employer to replace other sums previously appropriated by him to his own use constitutes embezzlement, for which he is liable to his employer in a civil action. Bowman v. Brown, 52 Iowa 437. In Gibson v. State, 13 Ga. 459, relied on by defendant, it was held that a payment made by an agent on a wrong account was not embezzlement when it appeared that all the money collected by him as a fiduciary had been fully paid in. But here, in a matter peculiarly within the knowledge of the defendant and in which the company had to rely on his statement, he reported that this check was to be credited on the Bland purchase (in which he had defaulted), and without its knowledge or consent he directed this application of the check, part of the proceeds of which he had derived from the sale of the machine to Brasington. This was a fraudulent misapplication of the proceeds of the check to protect himself from liability for the embezzlement of the proceeds of the Bland sale. A willful misapplication of funds by a fiduciary is within the terms of Revisal, 3406. The National Bank Act provides that any agent "who embezzles, abstracts, or willfully misapplies any of the money, funds, or credits" *Page 1009 with which he is intrusted shall be guilty of a misdemeanor. In construing that statute in U.S. v. Northway, 120 U.S. 332, it is said: "It is evidently the intention of the statute not to use the words `embezzle' and `willfully misapply' as synonymous. In order to misapply the funds of the bank it is not necessary that the officer charged should be in actual possession of them by virtue of a trust committed to him. He may abstract them from the other funds of the bank unlawfully, and afterwards criminally misapply them, or by virtue of his official relation to the bank he may have such control, direction, and power of management as to direct an application of the funds in such a manner and under such circumstances as to constitute the offense of willful misapplication." A general verdict of guilty covers all counts in the bill of indictment, and if good as to any count, it will be upheld when the offenses charged are of the same grade and punishable alike. S. v. Toole, 106 N.C. 739;S. v. Robbins, 123 N.C. 730; S. v. Sheppard, 142 N.C. 586; S. v.Avery, 159 N.C. 495. Even if there had been any error as to the count on the $1,050 check, there was testimony not contradicted, showing the misappropriation of the proceeds of the $55.85 check, and nowhere in the record or in the brief of the defendant is there any suggestion that there is any exception to the form of that count, and there (951) being evidence, the general verdict would stand. This is not the case of proving other offenses, but of proving this offense by showing that the proceeds of the sale of the machine to Brasington were fraudulently misapplied to cover up another defalcation by the defendant to the same company, not for the purpose of proving the former defalcation, but incidentally to show the fraudulent misapplication thereto of the proceeds of the sale to Brasington. No error.