May v. State, 41813

• Decision Date: 06 March 1961
• Docket Number: No. 41813,41813
• Citation: 240 Miss. 361,127 So.2d 423,84 A.L.R.2d 1095
• Parties: , 84 A.L.R.2d 1095 J. M. MAY v. STATE of Mississippi.
• Court: Mississippi Supreme Court

Page 423

127 So.2d 423

240 Miss. 361, 84 A.L.R.2d 1095

J. M. MAY v. STATE of Mississippi.

No. 41813.

Supreme Court of Mississippi.

March 6, 1961.

Charles H. McCraine, Jr., Houston, R. W. Boydstun, Sr., Louisville, for appellant.

Joe T. Patterson, Atty. Gen., by G. Garland Lyell, Jr., Asst. Atty. Gen., for appellee.

ETHRIDGE, Justice.

Appellant, J. M. May, was convicted in the Circuit Court, First Judicial District of Chickasaw County, of embezzlement. The offense involves a wrongful conversion to his own use, by a promoter of a proposed insurance company, of money paid by a subscriber for a preincorporation subscription for shares of stock.

Omitting the formal parts, the indictment charged: 'That J. M. May in said District, County and State, on or about the 20th day of November, A.D., 1958, being then and there the trustee and agent of one W. V. Metts have in his possession and under his care as such, money and property of the said W. V. Metts in the amount of $2,000.00 good and lawful money of the United States, and did thereafter, without the consent of the said W. V. Metts fraudulently and feloniously secrete, conceal and convert same to his own use, and feloniously embezzle the same, * * *.'

Apparently the indictment was based upon Miss.Code 1942, Rec., Sec. 2115 which provides in part that, if any trustee or agent of any private person 'shall embezzle or fraudulently secrete, conceal, or convert to his own use, or make way with, or secrete with intent to embezzle or convert to his own use, any goods, rights in action, money, or other valuable security, effects, or property of any kind or description which shall have come or been intrusted to his care or possession by virtue of his office, place, or employment, either in mass or otherwise, he shall be guilty of embezzlement, * * *.'

The constituent elements of the offense are (1) an agent or trustee of a private person, (2) embezzling or converting to his own use, (3) rights in action, money, or other valuable security, effects or property of any kind, (4) which have been intrusted to his care or possession by virtue of his position or employment. Code Sec. 2115; 18 Am.Jur., Embezzlement, Sec. 2.

In the early fall of 1958, W. V. Metts, of Houston, was Superintendent of the city schools. J. M. May came to his office and told him he was selling stock in a proposed life insurance company he was organizing, to be named the 'National Farmers Bank and Life Insurance Company' or 'National Farmers and Bankers Life Company'. Metts stated he was not interested, but, after May returned two or three other times and talked with him, referring to other persons in nearby cities who had subscribed to the stock, Metts agreed to subscribe for ten shares at $10 per share. On October 29, 1958, he wrote a check for this subscription payable to 'J. M. May, Trustee,' in the amount of $100, drawn on the Houston, Miss., State Bank.

Defendant later urged Metts to subscribe for additional stock in the proposed company. Metts told him he had a certificate of deposit in the Bank of Houston for $2,200, which could not be cashed until May 1959. Actually its maturity date was October 6, 1959. Defendant replied that he could put up this certificate as security for the subscription. Apparently Metts delivered it to May without any assignment at the time, but later May advised him the 'trustees' of the proposed company would not take the certificate without an assignment. Metts agreed to subscribe to $2,000 worth of stock. On November 20, 1958, he endorsed and subscribed the certificate: 'For value received I, we or either of us do hereby assign this certificate to J. M. May.' Metts said defendant was supposed to put the instrument in the bank with other money which he had received to organize the company, and, when organized, Metts was to receive $2,000 worth of stock. Defendant advised him that no person could purchase more than that amount. Since the certificate was in the principal amount of $2,200, and Metts had already given May a check for $100, May took the assigned certificate and gave Metts his check for $300. In short, Metts turned over to defendant 'as trustee' $2,000. Defendant was to deposit it in a bank with other subscription money, and, when the company was organized, he would issue Metts that amount of stock. Defendant told him the shares would be delivered by January 1, 1959. However, at the time of the trial in April 1960, Metts had not received from May any stock or any of the money which he had intrusted to May for the subscription. Metts said he never gave defendant permission to cash the certificate, but he later ascertained the bank had paid, on defendant's endorsement, the value of his certificate before maturity. Metts said that May's name as trustee on the $100 check was 'the way he wanted it made out.' He admitted execution of the assignment of the certificate, but said it was agreed that defendant was not to cash it, but rather put it in the bank until the stock was issued.

On November 19, 1958, one day before assignment of the certificate, Metts signed, at May's request, a written subscription for 250 shares of preferred stock of the proposed company. The subscription letter further stated: 'I have $2,000.00 fully paid. And I do hereby authorize you to use said sum for the purpose of capitalizing the Company and in payment of all necessary expenses of organizing the Company. * * * 'I understand that the shares of stock will be delivered to me when the charter is issued and organization completed.'

May told Metts that he had already talked with the Insurance Commissioner of Mississippi, who had approved the proposed incorporation. Metts later ascertained this was false. He said he turned the money over to May for safekeeping, until the shares were issued to him. He never received any stock. This Court may take judicial notice of the official records of the Secretary of State and the Insurance Commissioner. Mississippi-Gulfport Compress & Warehouses, Inc. v. Public Service Comm., 1940, 189 Miss. 166, 177, 196 So. 793; Gully v. Lumbermen's Mutual Casualty Co., 1936, 176 Miss. 388, 405, 166 So. 541, 168 So. 609; Jefferson Standard Life Insurance Co. v. Noble, 1939, 185 Miss. 360, 188 So. 289; Stone v. Robinson, 1954, 219 Miss. 456, 460-461, 69 So.2d 206; Briscoe v. Buzbee, 1932, 163 Miss. 574, 143 So. 407, 887. Those records reflect there is no Mississippi company incorporated under the stated names, or any foreign corporation with either of the names authorized to do business in this state.

E. A. Enochs, President of the Bank of Houston, saw May for the first time when he came to the bank to get a transfer to himself of Metts' certificate of deposit. Enochs refused, because it had not been assigned to him. Later May returned with Metts' assignment, and the account was transferred by the bank to May. Subsequently on December 5, 1958, May endorsed on the certificate over his signature 'Pay to Tyler (Texas) Bank and Trust Company or order.' The Bank of Houston then paid the proceeds to the Tyler bank. Enochs identified defendant's signature on the certificate.

Appellant argues that the verdict is contrary to the law and the overwhelming weight of the evidence, since Metts delivered the money to May not as his agent or trustee, but for purchase money for the stock, creating between them only the relationship of debtor and creditor. This requires an analysis of the characteristics of a subscriber-promoter status.

The defendant was a promoter of a proposed insurance company. He sold Metts a preincorporation subscription for shares of stock. In the absence of a special agreement to the contrary, supported by a valuable consideration, a...