People v. Wadsworth

• Court: Michigan Supreme Court
• Writing for the Court: MORSE, J.
• Citation: People v. Wadsworth, 63 Mich. 500, 30 N. W. 99 (Mich. 1886)
• Decision Date: 04 November 1886
• Parties: PEOPLE v. WADSWORTH.

30 N.W. 99

63 Mich. 500

PEOPLE v. WADSWORTH.

Supreme Court of Michigan

November 4, 1886

Error to Delta.

Information for embezzlement. Trial and verdict of guilty. Respondent appeals. The opinion states the facts.

E.E Osborn, for defendant and appellant.

MORSE J.

The respondent was convicted of embezzlement upon a trial in Delta county, a change of venue having been taken to that county from Marquette, where the information was filed and the alleged offense committed. The information consisted of two counts,--one attempting to charge the defendant with the embezzlement of the money of John Dillon and the other charging him with such embezzlement as the de facto treasurer of the city of Ishpeming. The trial proceeded upon the theory of the first count.

While no objection seems to have been raised in the court below to the information, we have been unable to find any allegation or averment in the first count that the moneys alleged to have been embezzled were the moneys of John Dillon. From a careful examination, one of two things may be inferred namely, that the moneys either belonged to the Cleveland Iron Mining Company, or to the city of Ishpeming; but there is not the slightest intimation that such moneys belonged to John Dillon, nor can any legitimate inference to that effect be drawn from the language of the information. But as the case will be disposed of upon the merits, the information need not be further discussed.

The undisputed facts will be found to disprove any embezzlement under the law. John Dillon was elected city treasurer of Ishpeming for the year 1883. He had held the office two terms immediately previous thereto. It seems that a peculiar method of electing this officer prevails in Ishpeming. The candidate is nominated and elected upon his running qualities,--his capacity to get votes,--but the money to secure such nomination and election is put up by some bank, which also furnishes the bonds. After the election, the candidate elected qualifies, and there his duties begin and end. The taxes are paid into the bank, and collected and disbursed by it. The treasurer has no further concern about the matter and is, of course, entirely ignorant of the duties of his office. The bank pays to him the fees allowed by law, and the profits made by the use of the money thus necessarily deposited in the bank seems to be a sufficient renumeration to the bank for its trouble and expense in the matter. Nobody can suffer any material loss under this arrangement except the public. While it may seem a novel method, it certainly relieves the treasurer of a great responsibility, and renders his administration of the office an easy one, with the same pay as if he performed the duties himself; and the bank, fortunate enough to elect its candidate, presumably has the means thereby at hand to repay its election expenses, and make a handsome profit besides.

John Dillon testifies that he knew absolutely nothing of the duties of his office, although he had been treasurer for nearly three years. The first two terms of his office he was elected and served the people in the manner above indicated, and all seemed to go on well. Wadsworth collected the money and kept the books. "I suppose Wadsworth was to account to other people who were entitled to the tax money. I was not to do anything myself. I did not know anything about the duties of city treasurer. I trusted Wadsworth to do the duties required of the city treasurer. I was elected. Mr. Wadsworth got my bond. I did not do anything there about assuming the office. I did not receive any books or any money. I suppose Mr. Wadsworth received them."

The respondent during these years was the managing member of the banking house of D.F. Wadsworth & Co., private bankers. During the first two terms of Dillon's office the funds received by respondent's bank were deposited in the bank the same as other moneys deposited by its customers, and mingled with them. The tax moneys were not kept or deposited as a separate fund, not to be used by the bank save for legitimate tax purposes, but became at once a part of the common cash funds of the bank, to be used and paid or loaned out the same as other moneys. Indeed, the bank could have no possible object in entering into such an arrangement as was made, unless it could use the tax money in any way it chose until it was wanted for the purposes for which it was levied. Dillon and the whole business community well understood the use that was being made of this money, and that it was not kept separate from the other funds of the bank, or intact.

When Dillon was elected the third time, he testifies he made the same arrangement. The money was to be kept and used as before. It was so kept and used. Unfortunately, however, for the city, the bank of D.F. Wadsworth & Co. did a losing and unprofitable business in the year 1883. In the afternoon of December 29, 1883, between the hours of 3 and 5 P.M., the Cleveland Iron Mining Company paid its taxes into the bank, to-wit, $11,942. This money was nearly if not all paid out to other depositors on Monday the 31st. On the second of January, 1884, the bank made a general assignment for the benefit of its creditors. At the time of the failure the bank was owing the city about _____________. The respondent turned out to the mayor of the city $1,902 in currency, and $6,800 in good paper notes. The mayor testifies that Wadsworth "offered a good deal more than that. I took what money I could negotiate, and sell and convert into money, and put into the treasury. I did not take any more, because I could not make any disposition of it, and I thought it would be of no use."

It appears without question that the moneys collected or paid in from taxes were deposited on an account called "City Taxes," and, after the taxes were all in, the books were balanced up in the business, and everything credited to this account, and the balance due the treasurer was credited to an account called "City Treasurer's Account." The moneys were deposited the same as any other deposits, as soon as collected, and mingled with other funds. The bank held itself liable to the city treasurer for that amount. This had been the practice for years, and with other treasurers before Dillon.

It is shown by the testimony of William H. Rood, the mayor of Ishpeming, who had been at the time connected with the respondent in the banking business, that before the failure of D.F. Wadsworth & Co., and in the fall of 1883 the Marquette County Bank had been organized to take the place of the bank of D.F. Wadsworth & Co., and succeed to its business. Wadsworth was made one of the directors of the new bank. It was organized for the express purpose of putting in fresh capital, and carrying on the business of D.F. Wadsworth & Co. The funds and paper of the old bank were to be turned over to the new bank, and such new bank was to assume and pay all the liabilities of the old bank, as far as the assets of the old bank would go. "The understanding was that his open accounts, subject to check, including the city treasurer's account, were to be assumed by us, [the Marquette County Bank,] and paid as he could out of his assets." On the first day of January, 1884, Rood and Nelson, the cashiers of the Marquette County Bank, went into Wadsworth's bank for the purpose of completing the proposed transfer. They made a careful examination of Wadsworth's books, found his bank in a worse condition than they had supposed, and therefore refused to make such transfer. Mr. Rood then told Wadsworth that the only thing he could do, in justice to his creditors, was to make an assignment at once. Wadsworth strongly objected to it at first, and "said it was nonsense, in the condition he was in." Rood further testifies "it was only after a long argument that I convinced him it must be done, and I insisted on...