State v. Cohoon

• Decision Date: 11 April 1934
• Docket Number: 1.
• Parties: STATE v. COHOON.
• Court: North Carolina Supreme Court

174 S.E. 91

206 N.C. 388

STATE v. COHOON.

No. 1.

Supreme Court of North Carolina

April 11, 1934

Appeal from Superior Court, Pasquotank County; Parker, Judge.

Walter L. Cohoon was convicted of embezzlement, and he appeals.

Reversed.

The defendant was indicted for the embezzlement of $4,652.12. The evidence disclosed that the defendant had been duly appointed administrator of the estate of Jos. Ellis on May 27, 1930. On May 27, 1931, he filed an annual account showing certain proper disbursements and a balance due of $4,678.83. On May 4, 1933, he tendered a final account showing a balance to be paid to the distributees of $4,652.16. The clerk did not accept this as a final account and issued a citation and order to show cause. The defendant appeared at the hearing and through counsel stated that he had invested the money in certain notes and presented the notes, stating that he held these notes as administrator as security for the money, and that, while there were two mortgages ahead of the ones securing the notes, arrangements had been made to cancel one of them.

The state also offered the evidence of Mr. LeRoy, a practicing attorney, who testified that he represented some of the heirs at law of decedent and that he had made a demand for settlement. It did not appear from the evidence where the heirs at law were living or who they were. Thereupon the state offered an affidavit of the defendant, which is as follows:

"That he is the respondent in this cause; that he was duly appointed and qualified as administrator of the estate of Joseph Ellis on the 27th day of May, 1930, with the American Surety Company as surety upon his bond in the amount of $10,000.00, and that shortly thereafter he received, as assets of said estate, the sum of $5,000.00 same being proceeds of United States Government Savings Certificates. That, while at the time of his appointment and qualification as aforesaid, respondent had information as to the beneficiaries of said estate, he was not at that time nor is he now sufficiently advised as to the personnel of said beneficiaries, or their relationship to his intestate, or the nature and propriety of their claims upon said estate as to authorize or permit the respondent to make a settlement with them or their legal attorney in fact and law. That, at such time, too, the respondent was not advised as to the amount of debts, if any, owing by said estate, for which he was required by law to make advertisement; that for these and other reasons respondent actually believed at such time, whether rightly or wrongly that he was required by law to retain possession of said fund for the full term of two years, and was further required to invest same during said period.

That prior to his qualification as administrator, as aforesaid to-wit, on November 18, 1929, this affiant, being largely indebted to his wife, Margaret W. Cohoon, for advances accumulating over a period of years, executed to her in payment and satisfaction of said indebtedness, twelve certain notes aggregating the sum of $24,000.00, secured by a deed of trust on a certain farm in Pasquotank County belonging to affiant, known as Black Acre Farm. That at the time when, as aforesaid, affiant received the funds belonging to said estate, to-wit, the sum of $5,000.00, the said Margaret W Cohoon was in need of ready money in order to make improvements upon certain real estate belonging to her. And that, in this situation, this affiant, honestly believing as aforesaid, whether rightly or wrongly, that it was not only his right but his duty to hold and invest said funds during said two-year period, and having further the honest purpose to secure said estate against any possibility of loss, proposed to the said Margaret W. Cohoon, that he would advance her a large portion of said fund, provided that she would thereupon deposit with this affiant, as said administrator, the notes aforesaid, aggregating $24,000, to be held by affiant as such administrator, as security for said estate and the due settlement thereof. That while it is true that at the time of the execution of said notes, secured by said deed of trust, there was upon the records of Pasquotank County two prior deeds of trust, one securing the Virginia-Carolina Joint Land Bank in the sum of $8,000.00, payable in installments, and the other securing the First and Citizens National Bank in the sum of $5,000.00, the latter of these deeds of trust had been executed for a temporary purpose only, with an intent at all times on the part of this affiant to substitute other security for it. That while the effectuation of this intent had been delayed for some time, due solely to procrastination, this affiant had, long prior to the institution of this proceeding, or to the issuance of the order of February 17th, arranged with said bank to substitute other security for said deed of trust. That this has now been done, with the result that said notes in the sum of $24,000.00 are now secured by a deed of trust, which is subject only to the claim of the land bank aforesaid, in the sum of only $8,000.00, and with the result, further, that the security held by said estate for the due settlement thereof is now, as it has always been under the intent of this affiant, ample and sufficient.

That Black Acre Farm is situate in the upper reaches of Pasquotank County, and contains approximately 360 acres, of which 240 acres are under cultivation, the remainder being cut-over timber lands suitable for pasturage. That said 240 acres of cleared land is, and was in 1930, of extraordinary fertility, highly improved and intensely cultivated. That it is equipped with a modern home and modern outbuildings. That the barn, particularly, is one of the most modern and best equipped in this section. That the soil is peculiarly adapted to the raising of corn and soy beans, for which purpose it was used in 1930, and since, together with the raising and breeding of hogs and cattle. That said farm, with its equipment, represents an investment of over $60,000.00 on the part of this affiant, and that, in the opinion of this affiant, said farm was well worth the sum of $50,000.00 in April or May, 1930, when the investment of the funds of said estate was made. That at such time corn was selling for $1.00 per bushel; soy beans for $1.40 per bushel; live hogs for 10c per pound, and veal calves were 7c and 8c per pound. And that, while at said time the imprint of the later catastrophic depression had been manifested, it was then the belief of this affiant, and of the general public, including experienced economists as affiant is advised, that such deflation was but temporary, and that prices of farm products would soon return to their former level, together with general prosperity.

That through a process of general and gradual decline farm products reached their low level in 1932. That during said year corn was selling at 25c per bushel; soy beans for 35c to 50c per bushel; live hogs from 3c to 3 1/2c per pound, and live veal calves for 5c per pound-with the result that, as the price of farm products, and particularly of those raised upon the Black Acre Farm, sank to these unprecedented levels, the market value of farm land, including the Black Acre Farm, shrunk in such proportions as to render it impossible to sell them, or to borrow upon them any appreciable portion of their real intrinsic value. And that, while it is true that the price of farm products has notably increased in the last month or two, such increase has not been sufficiently prolonged or become so stabilized, as yet, as to seriously affect the selling or borrowing value of farm land.

That this affiant has had no intent to commit a contempt of Court. That the investment of the funds belonging to said estate aforesaid, whether or not authorized by law, was made in good faith, with the present intention of repayment, which still abides, and in the full and honest belief that the security for said investment was far more than ample. That in the opinion of this affiant the intrinsic value of said Black Acre Farm, even under present conditions, is not less than $25,000.00 to $30,000.00. That at the time of said investment affiant had not the slightest doubt but that the money required to settle said estate would be forthcoming from said investment, and could be realized thereon at the time when settlement of said estate was required by law. That...