State v. Cochran

• Decision Date: 05 March 1935
• Docket Number: No. 33779.,33779.
• Citation: 80 S.W.2d 182
• Parties: THE STATE v. FORREST C. COCHRAN, Appellant.
• Court: Missouri Supreme Court

80 S.W.2d 182

THE STATE v. FORREST C. COCHRAN, Appellant.

No. 33779.

Supreme Court of Missouri, Division 2.

March 5, 1935.

Appeal from Jackson Circuit Court. — Hon. Allen C. Southern, Judge.

REVERSED.

Henry S. Conrad, L.E. Durham, Hale Houts and Wright Conrad for appellant.

The court erred in overruling defendant's demurrers to the evidence and refusing to direct a verdict of acquittal. There was failure of proof that the defendant was the agent, clerk or servant of the association, and obtained possession or had under his care funds in question by virtue of any agency for the association as charged in the indictment. On the contrary the State's evidence established without dispute that the association's relationship was with the trust company, and that the defendant's connection with the matter in question was solely as agent and officer of the trust company. State v. Castleton, 255 Mo. 210; State v. Meyers, 68 Mo. 267; State v. Maham, 138 Mo. 155; State v. Mispagel, 207 Mo. 574; State v. Peck, 299 Mo. 461; State v. Sheets, 289 S.W. 553; State v. Martin, 204 S.W. 539; State v. Moreau, 254 Mo. 407; State v. Morro, 313 Mo. 106; State v. Burgess, 268 Mo. 415; State v. Scott, 301 Mo. 413; State v. Link, 315 Mo. 194; State v. Bunton, 314 Mo. 585; State v. Brown, 171 Mo. 487; State v. Parker, 151 Atl. 328; State v. Carmean, 102 N.W. 99; Ballew v. State, 149 Pac. 1070. There was failure of proof that the funds in question were the property of the association as charged in the indictment. On the contrary, by the State's own evidence, the funds became the property of the trust company and the association was merely a creditor of the trust company in respect thereto. State v. Morro, 313 Mo. 98; Ballew v. State, 149 Pac. 1071; State v. Brown, 171 Mo. 486; State v. Martin, 204 S.W. 539.

Roy McKittrick, Attorney General, and Frank W. Hayes, Assistant Attorney General, for respondent.

(1) The court did not err in refusing to direct a verdict of acquittal or in overruling appellant's demurrer. Sec. 4079, R.S. 1929; State v. Heath, 8 Mo. App. 99; State v. Spaulding, 24 Kan. 1; State v. Silva, 130 Mo. 461. (2) The court did not err in refusing appellant a new trial because of the alleged improper remarks of the prosecuting attorney. State v. Napoli, 44 S.W. (2d) 55; State v. Bundy, 44 S.W. (2d) 121; State v. Cade, 34 S.W. (2d) 82; State v. Sherry, 64 S.W. (2d) 687.

WESTHUES, C.

Appellant was charged, by an indictment in the Circuit Court of Jackson County, Missouri, with the crime of embezzlement. On a trial he was convicted, and the punishment assessed was five years' imprisonment in the penitentiary. Appellant's motion for a new trial was overruled, whereupon he was sentenced, from which judgment he has appealed.

The indictment charged that appellant, Forrest C. Cochran, as the agent, clerk and servant of the Women's Christian Association of Kansas City, Missouri, received money in the amount of $2500, which he, appellant, unlawfully embezzled and converted to his own use. Appellant introduced no evidence at the trial. The principal point upon which he seeks a reversal of the judgment is that the State failed to prove that he was the agent, clerk and servant of the Women's Christian Association and that, therefore, the evidence was insufficient to sustain the charge made by the indictment.

The Women's Christian Association was a charitable organization. Its principal objects of charity were the maintenance of the Armour Home for aged couples and the Gillis Home for orphan children. Its funds were derived from voluntary contributions and gifts. In the course of time it had accumulated an endowment fund which in the year 1917, amounted to $150,000. Prior to the year 1917, the business of investing the association's funds was transacted by a committee of the association. During this year the association designated the Liberty Trust Company of Kansas City, Missouri, as its agent for the purpose of investing the funds of the association and as depository of its securities. With a number of minor changes this arrangement was still in force in April, 1930, at which time the trust company was placed in receivership.

Appellant was president of the Liberty Trust Company during all of the years from 1917 to 1930. He and members of his family owned fifty-four per cent of the capital stock. The Liberty Trust Company did a general banking business until the year 1923, when it sold its banking business to the Liberty National Bank. It carried on its other business through the Liberty Mortgage Company of which appellant was the president. All of the stock of the Liberty Mortgage Company was held by the Liberty Trust Company.

Beginning with the year 1917, at the time the Liberty Trust Company was made the trustee and agent of the association, three separate accounts were kept by the trust company of the funds of the association, namely the Armour fund, the Gillis fund and the general fund. After the Liberty Trust Company ceased to do a banking business these separate accounts were continued in the same manner and the funds were deposited in the Liberty National Bank by the Liberty Trust Company. Checks were drawn against these funds on blanks of the Liberty Trust Company, which checks were honored by the Liberty National Bank.

The terms of the agreement, whereby the agency of the Liberty Trust Company was created, were set forth in a letter written by appellant on behalf of the trust company to the Women's Christian Association. This letter was introduced in evidence. Many of the details are immaterial to the issues in the case. Those that are material are stated in the letter as follows:

"It is our understanding that it will be our duty to invest all of said funds and to keep the same invested in such securities as shall be approved in writing by a Committee of five, or a majority thereof.

"We will keep the endowment funds of the Women's Christian Association, of the Gillis Orphans Home and of the Armour Endowment Fund, and the securities in which same are invested separate each from the others and separate accounts shall be kept for each of said funds and the income from each of the said funds shall be deposited by us in separate accounts in this company, each account being subject to withdrawal by check of the Treasurer of the Association.

"We will, from time to time, upon the request of the proper officer of the Association, report to the Association the condition of each of the said funds and the amount of income standing to the credit of each of said funds upon our books, and will make an annual report to the Association on or before the first day of each year, giving in detail a list of the securities so held, the kind and character thereof, the face value thereof, the estimated actual value, the rate of interest, the income derived therfrom during the current year, and such other information as may be requested by the Association... .

"Our charges for handling this trust will be as outlined in our letter of August 8, 1917, to Mr. Askew and are as follows:

"`Our initial fee for accepting these securities and registering them on our books will be 1/6 of 1%.'

"`Our annual fee for acting as custodian of the securities, collecting the income and principal when due, crediting same to the account of the Association, rendering statements and investing funds will be 1/15 of 1%.' ...

"P.S. The charges of the Liberty Trust Company herein mentioned include the services of all salaried attorneys and employees of said Trust Company, unless otherwise especially provided for in writing."

Under this agreement the association turned over to the Liberty Trust Company securities and funds in the amount of $150,000. The trust company was treated, by the officers of the association, as the agent up to the time the trust company closed its doors. The Liberty Mortgage Company, mentioned above, was also placed in receivership the same day as the trust company. The Women's Christian Association filed claims against these corporations, which were allowed, amounting to approximately $200,000.

The officers of the association testified at the trial, without hesitation, that they always looked upon the Liberty Trust Company and not appellant as the agent of the association. From time to time the trust company made reports to the association of investments made for the approval or rejection of the finance committee of the association. All payments to the association of income from investments made were made by the trust company. Appellant, as president of this company, transacted all of the business with the association on behalf of the trust company. He frequently attended meetings of the board of directors and for a number of years kept the minutes of the board meetings. In July, 1925, two years after the trust company ceased to do a banking business, the Women's Christian Association wrote appellant, as president of the trust company, a letter which read in part as follows:

"Pursuant to some conversation with you at the last Finance Board Meeting, the Women's Christian Association at its regular meeting on July 2" adopted the following resolution:

"The securities belonging to or under the control of the Women's Christian Association including funds belonging to the Margaret Klock Armour Memorial Home for Aged Couples and the Gillis Orphan's Home and now or hereafter in the custody of the Liberty Trust Company, shall hereafter by kept in a box in the vault of some Safety Deposit Company of recognized responsibility.

"The President of the Liberty Trust Company shall be furnished with a key to said box but, the custodian of the vault shall be instructed that the box shall only be opened by the President of the Liberty Trust Company in the presence of the President, Recording Secretary or the Treasurer of the Women's Christian Association. This resolution shall continue in effect until set aside or modified by action of the Board of...