Sheffield v. State

• Decision Date: 27 September 1996
• Docket Number: CR-95-0930
• Parties: Henry B. SHEFFIELD, Sr. v. STATE.
• Court: Alabama Court of Criminal Appeals

Page 1282

706 So.2d 1282

Henry B. SHEFFIELD, Sr. v. STATE.

CR-95-0930.

Court of Criminal Appeals of Alabama.

Sept. 27, 1996.

Rehearing Denied Dec. 20, 1996.

Certiorari Quashed Dec. 12, 1997

Alabama Supreme Court 1960532.

Lee B. Williams, Grove Hill, for appellant.

Jeff Sessions and Bill Pryor, attys. gen., and Robin Blevins, asst. atty. gen., for appellee.

Elizabeth Bookwalter, associate counsel, Dept. of Ins., for amicus curiae Alabama Department of Insurance.

PATTERSON, Judge.

On November 16, 1995, the appellant, Henry B. Sheffield, Sr., was convicted by a jury of theft of property in the first degree, a violation of § 13A-8-3, Code of Alabama 1975. He was sentenced to three years in prison, which sentence was suspended; he was placed on five years' probation and ordered to perform 100 hours of community service. Additionally, he was ordered to pay court costs, to pay $69,797 in restitution (reduced by "any sums of money that have been paid to the insurance department or that will be paid to the insurance department or the insurance guaranteed association out of any fund[s] that are presently on deposit with any court or with any bank or any other financial institution that belongs to [the appellant]"), and to pay $50 to the Alabama crime victims compensation commission.

This case stemmed from the appellant's redemption of three certificates of deposit totalling $83,254.93 owned by Gold Bond Life Insurance Company (hereinafter "Gold Bond"), an insurance corporation ¹ of which the appellant was the president and sole shareholder. ² He deposited $67,254.93 of the proceeds from the certificates into his personal account; he deposited $14,000 into the bank account of an insurance agency that he also owned; and he took $2,000 in cash. Within the next 30 days he wrote from his personal account checks in an amount exceeding $60,000. The record does not show whether these checks were for business or personal purposes.

The appellant raises two issues in this appeal: 1) Whether the state proved beyond a reasonable doubt that the appellant exerted control over property, unauthorized by the owner of the property; and 2) whether there is a fatal variance between the allegations of the indictment and the proof at trial. However, because of our disposition of Issue 1, we need not decide Issue 2.

The appellant was indicted by a grand jury in Clarke County on August 26, 1994. The indictment reads:

"Henry B. Sheffield, Sr., ... did knowingly obtain or exert unauthorized control over checks and/or lawful currency and/or coinage of the United States of America, a better description of which is to the Grand Jury otherwise unknown, the property of Gold Bond Life Insurance Company, a corporation, of the value of $67,254.93, with the intent to deprive the owner of said property, in violation of Section 13A-8-3 of the Code of Alabama."

The appellant was found guilty by a jury.

"A verdict of conviction will not be set aside on the ground of insufficiency of the evidence, unless, allowing all reasonable presumptions for its correctness, the preponderance of the evidence against the verdict is so decided as to clearly convince this court that it was wrong and unjust. Johnson v. State, 378 So.2d 1173 (Ala.1979); Duncan v. State, 436 So.2d 883 (Ala.Crim.App.1983), cert. denied, 464 U.S. 1047, 104 S.Ct. 720, 79 L.Ed.2d 182 (1984)."

Page v. State, 487 So.2d 999, 1006 (Ala.Cr.App.1986).

The appellant's first contention is that he is not guilty of the theft of property in the first degree because, he argues, as the president and sole shareholder of Gold Bond, he authorized the cashing of the certificates of deposit. Section 13A-8-2(1) states: "A person commits the crime of theft of property if he ... [k]nowingly obtains or exerts unauthorized control over the property of another, with intent to deprive the owner of his property." (Emphasis added.) Section 13A-8-3(a) states: "The theft of property which exceeds $1000 in value ... constitutes theft of property in the first degree."

"The new definition of 'theft' specified in § 13A-8-2, Code of Alabama 1975, as clarified by the definitions given in § 13A-8-1, Code of Alabama 1975, was not intended to and in our opinion does not create a broader range of 'theft' crimes. Instead it was intended to unify the old 'theft' offenses and thereby 'eradicate the common law distinctions between the crimes of larceny, embezzlement and false pretenses' so that 'one accused of one form of theft [would not be allowed] to escape a legal sanction because of proof of a different form which interferes with property rights in essentially the same way.' See Commentary to §§ 13A-8-2 through 13A-8-5, Code of Alabama 1975."

Deep v. State, 414 So.2d 141, 147-48 (Ala.Cr.App.1982).

As shown above, before the adoption of the current theft statutes, Alabama prosecuted and punished theft offenses according to the specific details of the offense. The underlying alleged offense in this case most closely resembles the prior offense of embezzlement.

"Embezzlement is a statutory criminal offense. Knight v. State, 152 Ala. 56, 44 So. 585; Adams v. State, 43 Ala.App. 281, 189 So.2d 354. The State proceeds on the theory that the petitioner violated Tit. 14, § 126, Code of Alabama, 1940, which provides:

" 'Any officer, agent, clerk, employee or servant of any incorporated company, association of persons, partnership, or municipal corporation, or agent, clerk, employee, servant, or apprentice, of any private person or persons, who embezzles or fraudulently converts to his own use, or the use of another, or fraudulently secretes with intent to convert to his own use, or the use of another, any money or property which has come into his possession by virtue of his office, agency, employment, or apprenticeship, shall be punished on conviction, as if he had stolen it.' "

Benefield v. State, 286 Ala. 722, 723-24, 246 So.2d 483, (Ala.1971).

The state asserts in its brief that the proceeds of the cashed certificates of deposit belonged to the corporation and were therefore a corporate asset, it also argues that the appellant, even if he were the sole shareholder, was not authorized to spend the proceeds for his personal benefit. We agree that the assets of a corporation are legally the assets of the corporation even if all of the shares of the corporation are held by one shareholder.

" 'The principle here stated, that the legal title to the property of the corporation is in the corporation itself, and not the shareholders, cannot, of course, be questioned; and the authorities, for the most part, go so far as to hold that, even when the body ceases to be an association of persons by reason of the concentration of all the stock in the hands of one owner, the corporation is not thereby dissolved, and the sole stockholder does not thereby become legal owner of the property.' "

Warrior River Terminal Co. v. State, 257 Ala. 208, 211, 58 So.2d 100, 101 (1952) (quoting First Nat'l Bank of Gadsden v. Winchester, 119 Ala. 168, 24 So. 351, 352 (1898)).

While it is true that the legal title to the assets of a corporation is held by the corporation and not the shareholders, the Alabama Supreme Court has recognized that shareholders have an the equitable interest in those assets.

"Stockholders owning all the shares of stock of a corporation are the equitable owners of its assets, Autauga Co-Operative Leasing Ass'n v. Ward, 250 Ala. 229, 33 So.2d 904; Boozer v. Blake, 245 Ala. 389(14), 17 So.2d 152; First Nat. Bank of Gadsden v. Winchester, 119 Ala. 168, 24 So. 351,--and, of course, they are interested in its liabilities.

"The acts and contracts of persons owning all the stock of a corporation may be considered as the acts and contracts of the corporation, where the effect is the same as though the corporation had acted as such. Birmingham Realty Co. v. Crossett, 210 Ala. 650, 654, 98 So. 895 (quoting from Cook on Corporations )."

Williams v. North Alabama Express, 263 Ala. 581, 583-84, 83 So.2d 330 (1955).

The Department of Insurance, in its brief filed at the request of this court, relies on the insurance statutes of Alabama ³ for the proposition that the appellant was not authorized to deal with the certificates in the manner in which he did. We note, however, that the Department of Insurance concedes that the certificates were the property of Gold Bond and were properly considered assets of that corporation. The state relies on the separate corporate existence of Gold Bond for the proposition that the appellant exercised unauthorized control over the assets of another. While we agree with the state that the assets did legally belong to Gold Bond and with the Department of Insurance that the appellant may have violated the insurance laws of Alabama by his actions, which contributed to the subsequent insolvency of Gold Bond, we disagree as, a matter of law, that the appellant violated § 13A-8-3. He could not be guilty of theft of property from a corporation that he alone owned. Although the appellant's actions may constitute some other offense, such as a fraud on Gold Bond's creditors or on its policyholders, they did not constitute a theft from Gold Bond.

We agree with the appellant that McCord v. State, 501 So.2d 520, 526-28 (Ala.Cr.App.1986), is dispositive of this issue:

"[I]n only one of the four cases did the State prove that the defendant exercised 'unauthorized control' over the soybeans. The State's theory at trial was apparently that the defendant's 'unauthorized control' over the soybeans was proved not only by the testimony of the farmers themselves,[ ⁴] but also by evidence that the defendant did not comply with certain statutory licensing and bonding requirements relating to grain dealers, and by evidence that he disposed of soybeans which the farmers had mortgaged to the Farmers Home Administration. In our judgment and for the following reasons, neither of these theories, even if proved, establishes ...