United States v. Maulding

• Citation: 147 F. Supp. 693
• Decision Date: 17 December 1956
• Docket Number: Cr. No. 1839.
• Parties: UNITED STATES of America, Plaintiff, v. Glenn P. MAULDING, Defendant.
• Court: U.S. District Court — District of Alaska

147 F. Supp. 693

UNITED STATES of America, Plaintiff, v. Glenn P. MAULDING, Defendant.

Cr. No. 1839.

District Court, Alaska Fourth Division, Fairbanks.

December 17, 1956.

George M. Yeager, U. S., Atty., Fairbanks, Alaska, for plaintiff.

T. N. Gore, Jr., Fairbanks, Alaska, for defendant.

HODGE, District Judge.

Defendant was convicted by the verdict of a jury of the crime of embezzlement by bailee, in violation of Section 65-5-62, Alaska Compiled Laws Annotated, 1949, which section provides in part as follows:

"That if any bailee, with or without hire, shall embezzle, or wrongfully convert to his own use, or shall secrete, with intent to convert to his own use, or shall fail, neglect, or refuse to deliver, keep, or account for, according to the nature of his trust, any money or property of another delivered or entrusted to his care or control, and which may be the subject of larceny, such bailee, upon conviction thereof, shall be deemed guilty of embezzlement * * *."

The indictment charged in substance that the defendant feloniously and wrongfully converted to his own use the sum of $2,500, the property of the Bank of Fairbanks, by failing to deliver or account for said money, received by him as the purchase price for a Manhattan House Trailer which was sold by him to Glenn and Janette Hanneman, when it was in fact the property of the Bank of Fairbanks, pursuant to a bill of sale from the Manhattan Trailer Sales Company to the Bank, the defendant having been given custody of the trailer in trust by the Bank.

At the conclusion of the Government's case, the defendant moved for a judgment of acquittal, which was denied by the court. He now moves for a new trial upon the grounds that the court erred in not granting the motion for judgment of acquittal, that the government failed to prove the existence of any relationship of bailor and bailee between the defendant and the Bank of Fairbanks, and other grounds which were disposed of upon oral argument and need not be further considered here.

It is the contention of the defendant, as reflected in his brief in support of such motion, that a document designated "trust receipt" upon which the prosecution was largely based, given by the defendant to the Bank of Fairbanks, did not constitute a contract of bailment between the defendant and the bank nor establish any relationship of bailor and bailee as contemplated under the statute above noted. In this connection, defendant contends that such trust receipt was in legal effect a conditional sale, but if not, it is impossible to ascertain with certainty just what it is, except that it is not a contract of bailment.

The determination of this question requires an examination of the nature of the transaction between the bank and the defendant, and the nature and effect of the trust receipt, which appears from its face to have been issued pursuant to the Uniform Trust Receipts Law of Alaska (Chap. 40, S.L.A. 1951). The defendant had entered into a "Floor Plan Agreement" with the bank under the terms of which the bank agreed to finance the acquisition of trailers for the defendant as a dealer, doing business as Maulding Trailer Sales, prior to sale by the defendant, whereby the bank acquired title to the vehicle direct from the manufacturer-seller upon an invoice showing sale to the bank which was paid by the bank on sight draft, and "floored" the vehicle for retail sale by the defendant under the terms of a trust receipt executed by defendant to the bank. By such trust receipt covering the particular trailer involved, the defendant acknowledged receipt of such property from the bank, called "entruster", as "trustee", and acknowledged that a "security interest" in such property remains with the entruster until payment in full by him of a note annexed thereto, subject to the conditions and agreements contained on the reverse side thereof.

The promissory note, which is a part of said instrument, is for the sum of $2,500, payable upon demand, and contains the following pertinent clause:

"This Note is issued under the Floor Plan Agreement, and any amendments thereto, dated June 16, 1952, and delivered by the undersigned to the above-named payee and is subject to the provisions thereof. Upon the occurrence of any of the events specified in the said Agreement, the principal hereof may become forthwith due and payable in the manner, upon the conditions and with the effect provided in said Agreement."

The agreement referred to was not introduced in evidence, but it appears that the conditions referred to are set forth in the "Conditions and Agreements Forming a Part of the Trust Receipt" referred to in the body of the instrument and printed on the back thereof, which, so far as is pertinent here, are as follows:

"The Trustee agrees to return any and all of the Trust Property on demand and in good order and unused; to deal with the Trust Property as trustee for the Entruster, but with the right in the Trustee to exhibit the same and to sell all or any part of the same for the account of Entruster for cash and, if a minimum sale price has been specified by the Entruster, for not less than such price; upon the sale of any of the Trust Property (i) to notify the Entruster promptly, (ii) to hold the proceeds in trust for the Entruster and (iii) to deliver such proceeds promptly to the Entruster".

The evidence showed conclusively, and it was admitted upon the trial, that the defendant came into possession of the trailer described in the indictment under this trust receipt, that he sold the trailer to Glenn and Janette Hanneman and that he failed to account to the bank for the proceeds of such sale. The evidence further showed that he failed to notify the bank of such sale or hold such proceeds in trust for the bank but instead used such funds in payment of other obligations of his business, which he then closed and left town, leaving the bank to locate the trailer.

Defendant first contends that the "trust" thus created was not a bailment within the ordinary meaning of such term and cites the Illinois case of People v. Moses, 375 Ill. 336, 31 N.E.2d 585, 587, in which the court states the obvious rule that to sustain a conviction on an act charging larceny as bailee it is necessary that the evidence show there was a bailment and that the property was held by the accused as bailee; and further states as follows:

"In the application of the above principle of bailment to a criminal action of larceny by bailee it is an established rule that if the owner of goods alleged to have been stolen parts with both the possession and title of the goods to the alleged thief expecting something other than such goods to be returned to him, neither the taking nor the conversion amounts to larceny, and this is true where the owner is induced to part with the title and the possession through fraud and misrepresentation of the alleged thief. If, however, the owner parts with the possession although voluntarily, but does not part with the title, expecting and intending that the goods shall be returned to him or disposed of in some particular manner as directed or agreed upon for his benefit, the goods may, under such circumstances, be feloniously converted by the bailee and such conversion relates back and makes the taking and conversion a larceny". (Emphasis added.)

This decision does not support the defendant's contention but is contrary to it, for in the case at bar the bank did not part with the title but parted only with the possession, expecting, according to the terms of the instrument, that the trailer would be either returned to it or disposed of in the manner directed for its benefit.

Generally a bailment is defined as a delivery of a thing...