State v. Clayton

• Decision Date: 16 November 1932
• Docket Number: 5183
• Court: Utah Supreme Court
• Parties: STATE v. CLAYTON et al

15 P.2d 1057

80 Utah 557

STATE v. CLAYTON et al

No. 5183

Supreme Court of Utah

November 16, 1932

Appeal from District Court, Fourth District, Utah County; Geo. W Worthen, Judge.

J. P Clayton and T. H. Heal were convicted of embezzlement, and first named defendant appeals.

REVERSED AND REMANDED.

Christenson & Straw, of Provo, for appellant.

Geo. P Parker, Attorney General, and L. A. Miner, Deputy Attorney General, for the State.

STRAUP J. EPHRAIM HANSON, J., EIAS HANSEN, J., FOLLAND, J., concurring, CHERRY, C. J., dissenting.

OPINION

STRAUP, J.

The defendants, Heal and Clayton, in the Fourth judicial district, by information, were jointly charged with the crime of embezzlement. They were tried separately; each defendant being represented by different counsel. Both were convicted, and both appeal. Each filed and presented to this court a separate and complete record of the cause. There is no substantial difference in the records. Separate briefs were filed in each case. The Clayton Case was filed first in this court. The two cases, however, were argued and submitted together at the same time and at the same term.

Both defendants complain of the sufficiency of the information, the sufficiency of the evidence to support the information and the verdict, portions of the charge to the jury, and of the court's refusal to charge as requested by the defendants. As the Clayton Case was filed first, we shall first consider that case. What is said concerning it equally applies to the Heal Case.

The substance of the information is that Heal was president of the Provo Consolidated Real Estate Company, a domestic corporation doing business at Provo, Utah; that Clayton was the secretary of the company, and that both were its managing officers; that on May 7, 1928, John Bestelmeyer at Provo executed and delivered to the real estate company his check drawn on the Knight Trust & Savings Bank of Provo in the sum of $ 1,208.67, payable to the order of the real estate company, which "check was delivered as aforesaid for the use and benefit of Janie Smith, and that Heal and Clayton, as officers of the Provo Consolidated Real Estate Company, by and through the Provo Commercial & Savings Bank (at Provo), did on the 9th day of May, 1928, present said check to the said Knight Trust & Savings Bank for payment and received the sum of $ 1,208.67," lawful money of the United States; that Heal and Clayton as officers of the real estate company being "intrusted with said check and said money, the proceeds of said check, as bailee of Janie Smith, and the said check and the said money, the proceeds thereof, together with other money paid to the Provo Consolidated Real Estate Company, a corporation, prior thereto, was intrusted to and received by" Heal and Clayton as officers of the real estate corporation to be delivered by them to the I. O. O. F. Home Board of Utah, a corporation, "for the purpose of paying a certain note secured by a real estate mortgage on property owned by Janie Smith, said note and mortgage being made and executed by said Janie Smith to Harvey Cluff and by said Harvey Cluff assigned to the said I. O. O. F. Home Board of Utah, a corporation, and being then and there owned and held by the said I. O. O. F. Home Board of Utah, a corporation, in the sum of $ 2,500.00," and that Heal as president of the real estate company and Clayton as secretary thereof "being so intrusted as bailee of said check and the said money, proceeds of said check, to the amount and value of $ 1,208.67, the property of Janie Smith," as officers of the real estate company, failed and neglected to deliver the moneys of the said check to the I. O. O. F. Home Board of Utah to pay the note and mortgage "in accordance with the terms of said bailment," and that on the 9th day of May, 1928, Heal and Clayton, as officers of the real estate company, "wilfully, unlawfully, fraudulently and feloniously converted the check and proceeds thereof to their own use."

A general and a special demurrer were interposed to the information, both of which were overruled. A plea of not guilty was thereupon entered. The substance of the evidence adduced by the state is that the Provo Consolidated Real Estate Company was a corporation organized under the laws of Utah in 1917 to do a general real estate business at Provo; to buy and sell real estate and negotiate and effect sales of lands; to act as agent for owners in the collection of debts and rentals; to do a general brokerage business in notes, mortgages, stocks, etc., and in buying and selling them; to borrow money for the benefit of the corporation; to negotiate, place, and collect loans of money for a commission; and to do all things necessary and relevant to a general insurance, loan, and real estate business. The company was capitalized for 5,000 shares of the par value of $ 1 each, of which Heal, as an incorporator, held one share, and was elected secretary and a director of the company. The remaining shares were subscribed for and held by others.

Clayton was not an incorporator, nor then an officer of the company. In 1921 Heal was elected president and a director of the company and Clayton a director, secretary, and assistant treasurer. Heal then held 1,000 shares. Just what Clayton then held is not made to appear, but in May and October, 1924, Heal held 2,830 shares and Clayton 1,419 shares. The evidence shows that from thence on Heal and Clayton constituted the managing officers of the company.

From 1923 to June 30, 1929, Janie Smith did business with the company. The state put in evidence an itemized account of her transaction with the company between such dates. An account, which was a final account, was furnished her by the company June 30, 1929. The correctness of it in no particular was questioned or challenged. The more important business transactions had by her with the company began in January, 1924. At that time she, through the company, obtained a loan of $ 2,500 from one H. Cluff. She gave her promissory note therefor, the payment of which was secured by a mortgage on real estate owned by her. The principal of the note was "payable three years after date (January 15, 1924) with privilege of paying off at any interest paying period after one year." The interest at the rate of 8 per cent per annum was payable "quarter yearly." The moneys obtained by the loan were with the consent of Mrs. Smith paid to the real estate company and credited to her account. Some of the moneys, as directed by her, were paid and applied by the company to obligations owed by her. Part thereof was paid to her. The interest as it matured on the note was paid to Cluff by the real estate company out of moneys held by it to the credit of Janie Smith. Cluff on December 22, 1924, assigned the note and mortgage to the Home Board of the I. O. O. F. of Utah to secure the payment of a note given by him to the Home Board for money borrowed by him from it. The Cluff note was paid, and on February 19, 1929, the Home Board, at the request of Cluff, assigned the Smith note and mortgage of Freda Cluff, the former wife of Cluff. Not anything is made to appear that the real estate company or Heal or Clayton had any notice or knowledge of such assignments. At the time of the trial, the interest but no part of the principal of the Smith note had been paid.

On April 30, 1926, Janie Smith by written contract sold the real estate, upon which she had given the mortgage, to Margaret Bestelmeyer for $ 8,000, $ 1,000 of which was paid in cash, $ 1,000 to be paid August 30, 1926, and $ 500 on April 30 of each year thereafter until the sum of $ 8,000 was fully paid, together with interest at 8 per cent per annum on all deferred payments; the interest payments being payable semi-annually. The contract provided all payments, both principal and interest, were to be made to the Provo Consolidated Real Estate Company. It further provided that the seller, Janie Smith, had the right to execute and maintain a loan secured by mortgage on the property not to exceed $ 2,500. The sale of the real estate was negotiated by an agent of the real estate company other than Heal or Clayton, for which negotiation the agent was allowed a commission of $ 400 which was charged against the account of Janie Smith. At that time the account between her and the real estate company showed a credit in her favor of $ 4,643 and a debit of $ 3,381, or a credit balance over the debit account of $ 1,262. The $ 1,000 paid in cash in the real estate transaction was paid by check of J. M. Bestelmeyer, the husband of Margaret Bestelmeyer, payable to the order of and was paid to the real estate company and credited to the account of Janie Smith. On September 8, 1926, Bestelmeyer paid an additional $ 1,000 on the purchase of the real estate; on July 16, $ 38; on December 16, $ 278; on February 25, 1927, $ 500; and on May 7, 1928, $ 1,208.67--all of which payments were made to the real estate company and were credited to Janie Smith.

Thereafter five additional interest payments were made to the real estate company by Bestelmeyer, a payment of $ 200 on the principal March 28, 1929, and on June 8 a further payment on the principal of $ 700, all of which were also credited to the account of Janie Smith. The last interest payment made was June 30, 1929. After May 8, 1928, when the payment of $ 1,208.67 was made, the real estate company by about twenty different payments up to June 28, 1929, paid interest on the Cluff mortgage and cash to Janie Smith amounting to over $ 500 and charged such payments against her account. On June 30, 1929, there was a balance remaining unpaid on the Bestelmeyer contract of about $ 4,428 and some unpaid interest. On December 20, 1929, the amount remaining...