State v. Carmean

• Decision Date: 10 January 1905
• Parties: STATE v. CARMEAN.
• Court: Iowa Supreme Court

126 Iowa 291

102 N.W. 97

STATE

v.CARMEAN.

Supreme Court of Iowa.

Jan. 10, 1905.

Appeal from District Court, Marshall County; G. W. Burnham, Judge.

Defendant was convicted for embezzlement, and sentenced to imprisonment in the penitentiary for two years at hard labor. From this judgment he appeals. Reversed.J. L. Carney, for appellant.

Charles W. Mullan, Atty. Gen., and Lawrence De Graff, Asst. Atty. Gen., for the State.

McCLAIN, J.

Defendant was the president and treasurer of the Rhoades-Carmean Buggy Company, a corporation doing business at Marshalltown, and engaged in the manufacture and sale of carriages and other vehicles. This corporation will be referred to in the opinion as the “company.” In November, 1901, the firm of Roemer & Miller, doing business at Hampton, Iowa, entered into a commission contract for the sale of vehicles for the company, and thereafter received consignments for which they executed notes, with the arrangement that such notes should be paid as the carriages were sold, the notes to be extended from time to time until sufficient sales were made to satisfy them, and the time within which each consignment should be sold being limited by the contract. In December, 1901, Roemer & Miller executed certain notes, five in number, for a consignment of vehicles, which notes were indorsed by the company and transferred to one Meickley. Subsequently, by remittances, which were to be applied as directed, in part on open account and in part on these notes, two of these notes were taken up, the company giving receipts at the time for the remittances, and subsequently paying off the notes in the hands of Meickley, and returning them to Roemer & Miller. In June, 1902, Roemer & Miller sent to the company a draft for $925.91, for which they asked credit, on account and notes, for $974.64, the difference between the amount of the draft and the amount of the credit asked being a discount of $48.74, to which they were entitled under their contract, and then directed that, out of the amount sent, $385.50 be applied on the notes given in December, and $585.15 on open account. This draft came into the hands of the clerks of the company in the transaction of their usual business, and credit was given to Roemer & Miller, as asked, for the amount to be applied on open account; but as the notes were not in the hands of the company, but in the possession of Meickley, they were not immediately taken up, and, in September following, these notes being still unpaid, the company made an assignment, and immediately afterward went into bankruptcy. The notes in the hands of Meickley were enforced as against Roemer & Miller, and the defendant is charged with the embezzlement of the sum of $385.50 belonging to Roemer & Miller, which should have been applied to the payment of the notes.

It is not claimed that the money which defendant is charged to have embezzled was intrusted to him personally by Roemer & Miller, or came into his hands, nor that he had any personal knowledge of its receipt, nor that he made any direction as to its disposition, nor that he derived any personal benefit from its misappropriation. Indeed, it is fully conceded that, except as defendant may be chargeable with the general conduct of the business of the company, he is in no way liable, civilly or criminally, for the failure to apply this sum of $385.50 to the payment of notes in Meickley's hands. We come, therefore, directly to the question whether defendant can be held criminally accountable for the failure of the clerks and servants of the company to apply this sum of money in the satisfaction of the notes which it was sent to pay.

The crime of embezzlement is essentially a statutory offense. The provisions of the section of the Code defining it are as follows: “Sec. 4842. If any officer, agent, clerk or servant of any corporation or voluntary association, or if any clerk, agent or servant of any private person or co-partnership, except persons under the age of sixteen years, or if any attorney at law, collector or other person who in any manner receives or collects money or other property for the use of and belonging to another, embezzles or fraudulently converts to his own use, or takes and secretes with intent to embezzle or convert to his own use, without the consent of his employer, master or the owner of the money or property collected or received, any money or property of another, or which is partly the property of another and partly the property of such officer, agent, clerk, servant, attorney at law, collector or other person, which has come to his possession or under his care in any manner whatsoever, he is guilty of larceny. If money or property is so embezzled or converted by a series of acts during the same employment, the total amount of the money and the total value of the property so embezzled or converted shall be considered as embezzled or converted in one act, and he shall be punished accordingly.” Although this section in terms provides that any officer of a corporation receiving or collecting money for the use of or belonging to another, who embezzles or fraudulently converts it to his own use, is guilty of embezzlement, nevertheless the plain purpose of the statute is to provide, with reference to the officers of corporations, that they shall be criminally liable for the fraudulent conversion of the money or property of the corporation just as agents, clerks, or servants of a private person are liable for a like fraudulent conversion of the money or property of their employers, or as any person who receives money or property for the use of and belonging to another is criminally liable for fraudulent conversion to his own use of money or property thus intrusted to him. The plain purpose of the statute is to punish those who in a fiduciary relation receive and fraudulently convert money or property intrusted to them, or which comes into their hands by virtue of such relationship. The crime of embezzlement, as generally defined by the statutes, consists essentially of the fraudulent conversion or misappropriation of property received in a fiduciary capacity. State v. Roubles, 43 La. Ann. 200, 9 South. 435, 26 Am. St. Rep. 179;U. S. v. Harper (C. C.) 33 Fed. 471;State v. Johnson, 49 Iowa, 141;State v. Hengen, 106 Iowa, 711, 77 N. W. 453;State v. Engle, 111 Iowa, 246, 82 N. W. 763; 2 Bishop, Cr. Law, § 325. To a third person who intrusts his money to a corporation, an officer of the corporation is evidently not liable, civilly or criminally, unless by some act or neglect on his part the money is lost or misappropriated; and in view of the concession that defendant did not, through any personal act of his, misappropriate or cause the misappropriation of the particular sum of money intrusted to the company for the payment of the notes above referred to, we are led to the inquiry, What act or omission of defendant with reference to this money was criminal?

The indictment charges that defendant (not as officer of a corporation, but individually) did unlawfully, etc., steal and take $385.50 of the property of Roemer & Miller, with intent on his part to deprive them of the same, and convert the same to his own use and the use of the company, without the knowledge or consent of Roemer & Miller; but in describing the method in which the crime was committed, the indictment further recites that defendant was the president and treasurer of the company, and financially interested therein as stockholder, and had charge of its business, with full knowledge of its affairs and system of business, and details the transactions already referred to between the company and Roemer & Miller, and then alleges that the money received by the company was wrongfully and fraudulently, and with intent to convert the same to the use of the corporation and deprive Roemer & Miller thereof, appropriated by defendant to the uses of the corporation, all with the knowledge, consent, and direction of said defendant, and by means of the system of business by him organized. From the allegations...