MacEwen v. State

• Decision Date: 10 February 1950
• Docket Number: 79.
• Parties: MacEWEN v. STATE.
• Court: Maryland Court of Appeals

71 A.2d 464

194 Md. 492

MacEWEN v. STATE.

No. 79.

Court of Appeals of Maryland.

February 10, 1950

Wesley E. Thawley, Denton, and John Clarence North Easton (Lawrence E. Birge, Easton, and W. Brewster Deen Denton, on the brief), for appellant.

Kenneth C Proctor, Asst. Atty. Gen. (Hall Hammond, Atty. Gen., and Harry E. Clark, Jr., State's Atty. Talbot Co., Easton, on the brief), for appellee.

Before MARBURY, C J., and DELAPLAINE, COLLINS, GRASON, HENDERSON and MARKELL, JJ.

GRASON, Judge.

John H. MacEwen trading as Campbell-Ensor Company, was engaged in the business of selling advertisement specialties, such as pencils, book-matches, calendars, and fans, with offices at Easton, Maryland. The Maryland Credit Finance Corporation (called herein 'Corporation') financed him in this business. From 1942 to 1944 there was no written agreement between the Corporation and MacEwen, and their transactions were conducted by oral agreement. In 1944 a written agreement was entered into. This agreement, which is filed as an exhibit in the case, required MacEwen to file with the Corporation, quarterly, a financial statement; it gave the right to the Corporation to select such orders placed with MacEwen by such business houses as it chose, and the Corporation discounted these orders at their face value. To further secure the Corporation, MacEwen gave it a blanket assignment of all his assets.

The business was operated in this manner: MacEwen's salesmen solicited orders from business houses for calendars and other specialties. These orders were advertisement of a particular business, and the name of the customer appeared on the calendar or other form of advertisement. MacEwen placed these orders with firms for the purpose of manufacturing them. The business houses would not pay for these orders until they were delivered by MacEwen. On occasions these orders would not be ready for delivery for from nine months to a year, and would be paid for upon delivery. When these orders were received by MacEwen they were discounted by the Corporation, and it was the money thus received that enabled MacEwen to meet current expenses, such as payment of commissions to salesmen, to the concerns that manufactured these specialties, office expenses, and other expenses necessary to carry on the business. The concerns that placed such orders knew nothing of the financial arrangement between MacEwen and the Corporation. When an order that had been discounted was paid to MacEwen, under their agreement MacEwen was to promptly pay the money received to the Corporation.

This business prospered, and it grew from a mere trickle to an $80,000.00 a year business. Mr. Roulston, an official of the Corporation, has, from the inception to the termination of their business transactions, handled the MacEwen account. In 1947 Roulston told MacEwen that his business was too large and he would have to reduce it to not more than $40,000.00. He refused to discount further orders until the business had been so reduced. MacEwen did reduce his indebtedness to the Corporation by the sum of $16,000.00, in the summer of 1947. He had orders for calendars for the year 1948, and he persuaded Roulston to finance him for that particular business. Roulston accommodated him until about March, 1948, when the Corporation refused to discount future orders until his business was reduced. After March 1948 his business collapsed and he was thrown into bankruptcy.

On May 17, 1949, the Grand Jury for Talbot County returned an indictment against MacEwen for obtaining the sum of $519.50 from the Corporation on the 19th day of May, 1947, by means of false pretense. A Bill of Particulars filed by the State, on demand of the traverser, charged that the false pretense by MacEwen 'consisted of the representation that a certain written paper given to the Maryland Credit Finance Corporation, * * * on or about the twelfth day of May, in the year of our Lord nineteen hundred and forty-seven', was then and there a true and correct statement of the net worth of MacEwen when he then and there well knew he was insolvent. This statement was signed by the traverser on May 10, 1947, and filed as 'State's Exhibit No. 2' in the case.

The defendant was tried in the Circuit Court for Talbot County, before a jury, and found guilty, and from a judgment and sentence, MacEwen appealed.

The questions presented to this court arise solely on rulings of evidence of the lower court. Mr. Roulston has been president of the Corporation since 1946, and prior to that time he was executive vice-president and secretary. He was called as a witness for the State. After describing the nature of MacEwen's business, he was asked: 'Q. Now I hand you two more paper writings, Mr. Roulston, and ask you what they are--tell the jury?' This question was objected to and counsel for traverser stated: '* * * They claim that the false pretenses in question were perpetrated by a written financial statement dated April 30, 1949. At the same time they introduce a similar statement which was dated December 31, 1946; in other words, just four months prior to that. I didn't object to that because both of those statements are filed in the various bills of particulars in these analogous cases. * * * Now the question now arises in my mind as to just how far we should go into other cases, because this man is not indicted for conspiracy, fraud or embezzlement or larceny. I think the Court should rule over what period of time he should be allowed to introduce financial statements.' The court did not rule as requested by counsel. The witness then testified: 'I have a financial statement submitted to us by John H. MacEwen, trading as Campbell-Ensor Company, dated January 2nd, 1946, and recording the condition of his business as of that date, signed by him as of that date, January 2nd. I have another dated July 31st, 1948, recording the condition of John H. MacEwen, trading as Campbell-Ensor Company, signed by Mr. MacEwen, and dated August 10th, 1948.' These statements were then offered in evidence over the objection of the traverser. After stating that the relationship between the witness and MacEwen was satisfactory and one of trust and confidence, the witness stated: 'That relationship went along until the middle of 1948, when I was pretty well convinced that some of the accounts that should have been paid to us had not been paid and, as a matter of fact, the funds from the customers had been diverted and not turned over to Maryland Credit in accordance with the agreement and the arrangement. My first go around with Mr. MacEwen on the subject, he told me that about $17,000.00 worth of customer payments had been accepted by him, not turned over to us. * * * Q. When did this happen, Mr. Roulston? A. This is during June of 1948.' Counsel objected and the court heard his objection but made no ruling until after the following question: 'Mr. Roulston, could you tell the court and jury when the diversions were made, if you know? A. I will have to finish my statement. $17,000.00 was the starter. Within a few days--(The Court) We will admit this subject to exception. A. Within a few days, under more pressure, I was told it was $24,000.00. Under greater pressure, lists were delivered that totaled over $36,000.00.' That conversation which the witness had with MacEwen took place in June, 1948.

'(The Court) When did the conversations take place themselves? A. The numerous conversations took place in the preceding period of months and months in the past.

'Q. Can you approximate the time? A. Well, I would say from six to nine months in the past.

'Q. Six or nine months prior to June, 1948? A. Yes. These are small accounts, of course, made up of a multitude of accounts.

'Q. In other words, the statements which you discovered at that time ultimately totaled over $36,000.00? A. Yes, sir.

'Q. Which were converted, which had taken place six to nine months prior to June, 1948? A. That's correct. (Mr. Thawley) I object to any of this testimony going into the record.'

There was no ruling by the court, and the witness continued to testify as to sizeable sums that were received by MacEwen from customers and not paid to the Corporation under his agreement with it. After Roulston had given this long and rambling account, Mr Thawley, addressing the court, said: 'Does your Honor feel that all of this should go in?' To which the court replied: 'No, but the Court can't object for you, Mr. Thawley. (Mr. Thawley) I ask that it be stricken from the record, your Honor. I don't know how far back it should go. (The Court) Do you object to the last question? (Mr. Thawley) I object to the question and move that the answer be stricken out. (The Court) You should have objected soon enough, so we will overrule it.' The witness was asked how much MacEwen owed the Corporation 'at this time', and over objection he answered $63,909.39. On cross-examination the witness was asked about the conversions testified to in chief over objection of the traverser. The question was asked: 'Now then, will you tell the Court and jury what false pretense Mr. MacEwen practiced on your corporation on May 19th, 1947, to obtain that check.' To which he answered: 'I must rely on the reports of my associates, which tell me that this statement is not a true statement, therefore--(Mr. Thawley) I object and ask that the answer be stricken out. (The Court) Overruled.' It appears that as to the accounts the witness testified to, he had no personal knowledge, but was repeating what his 'associates' said. This testimony should have been stricken out. It was not competent for the witness to repeat what they told him. It was hearsay evidence, and reversible error. The objection was made when the witness first...