State v. Holdren

• Citation: 387 P.2d 446,143 Mont. 103
• Decision Date: 18 December 1963
• Docket Number: No. 10570,10570
• Parties: The STATE of Montana, Plaintiff and Respondent, v. Norman HOLDREN, Defendant and Appellant.
• Court: United States State Supreme Court of Montana

Page 446

387 P.2d 446

143 Mont. 103

The STATE of Montana, Plaintiff and Respondent, v. Norman HOLDREN, Defendant and Appellant.

No. 10570.

Supreme Court of Montana.

Dec. 18, 1963.

John J. Cavan, Jr., Billings (argued), for appellant.

William J. Speare, John L. Adams, Jr., Billings, Charles Bradley, Billings (argued), Donald Garrity, Helena (argued), for respondent.

CASTLES Justice.

The appellant, Norman G. Holdren, hereinafter referred to as defendant, was convicted on two counts on a charge of grand larceny of property held by him as an agent, under R.C.M.1947, § 94-2701, subd. 2. A two year sentence was imposed on each count; said sentences to be served concurrently. This appeal is taken from the judgment of conviction entered on the verdicts.

On May 25, 1961, defendant, his wife, and another, set up a corporation known as United Businesses, Inc. Each of these persons owned one share of this corporation. On May 30, 1961, the corporation purchased a business known as Collector's, Incorporated which appears from the record not to have been in fact a corporation. United Businesses, Inc., then changed the name of its purchase to Professional Collector's and Personal Budget Service. Subsequently, the third incorporator of United Businesses, Inc., was bought out by defendant and his wife. Thereupon the corporation, with defendant as its executive officer, began operating the collection business by soliciting and accepting accounts for collection from various business people and others in and around Billings.

Late in 1961, United Businesses, Inc., doing business then as Professional Collector's, found itself in financial distress which continued more of less uninterruptedly from that time until the business was closed on May 31, 1962.

It was defendant's job, as president of United Businesses, Inc., and manager of Professional Collector's (which were in reality one and the same business), to solicit accounts for collection. He had made arrangements with Montana Reserve Finance Corporation, one of their clients, to collect debts of approximately $12,000. For this service Professional Collector's was to receive a commission of one-third of all sums collected. It appears that when each account was accepted by Professional Collector's they returned an acknowledgment to the client. The accounts were either paid by the debtor directly to the creditor, or were paid in to the collecting agency, Professional Collector's. If the funds were paid in to the collecting agency it was their practice to post that amount in their books. In this accounting procedure a division of the monies was then made in the books. The collecting fees and commissions were listed in respective columns and the remaining amount was credited to the account of the client. In this manner defendant kept a running account of all monies owing to each of his clients. However, all the actual payments received were deposited to the account of Professional Collector's in a Billings bank. From this account the defendants drew monies to pay withholding taxes, rent, salaries (including defendant's own salary), car payments and other expenses of the business.

Defendant as executive officer of the corporation and collecting agency, after the third incorporator left, had the sole power to draw upon this bank account. Defendant had complete control of the books and except for some ministerial posting he kept complete possession.

It further appears from the evidence and the testimony that the expenses of the business exceeded the commission share due Professional Collector's. Thereupon defendant, as executive officer, consistently drew upon the bank account in his endeavor to meet the expenses of Professional Collector's. It is admitted that defendant knew that he was thereby using the funds of his clients to meet those expenses. Defendant asserted that he did this upon advice of counsel and in the belief that so long as he recognized the debt, evidence in his bookkeeping, there was no felonious wrongdoing.

Upon knowledge of defendant's business procedures and the filing of a Federal tax lien, the various clients refused to turn over any more accounts, demanded accountings and remittances. This in turn compounded defendant's financial difficulties by making it virtually impossible to remit the amounts owing. His financial house of cards had collapsed.

During the time of these events defendant appears to have embarked upon a program to obtain financing to sustain the faltering business. This effort, too, was financed with clients' funds. His efforts were unsuccessful. It appears he tried to forestall his clients' demands through his secretarial help. The device used was to have them inform the inquiring client that there would be an accounting made in the near future. If the client called around the first of the month he was to be informed that an accounting would be forthcoming on the fifteenth. If they called around the fifteenth the accounting was to be rendered on the first of the next month.

The jury was presented with testimony that defendant was soon to leave the Billings area and had made some effort to hide knowledge of this fact. Other testimony was given that defendant was having a trailer constructed for himself and had asked the manufacturer to 'keep it a secret that he [defendant] was, that he had another job and was leaving town and he was going to leave by Friday.'

On or about June 4, 1962, the president of the Montana Reserve Finance Corporation spoke on the telephone with the defendant. It appears in the record that defendant felt he had committed no wrong but 'he didn't intend to pay us [Montana Reserve Finance Corp.] or anyone else.'

These facts and their effect upon defendant's clients initiated the filing of complaints and the resulting informations.

On June 20, 1962, and on August 29, 1962, the county attorney of Yellowstone County filed in the district court two informations charging grand larceny.

The first information, No. 6422, charged the defendant, Norman G. Holdren, with acting as the agent of the Montana Reserve Finance Corporation and on or about June 5, 1962, of having misappropriated $285.33 of that firm's money. This account was collected by defendant from a Mr. Christiansen. Upon this charge the jury found the defendant guilty.

The second information, No. 6449, contained three counts. The first count charged defendant with acting as agent of Montana Reserve Finance Corporation on or about April 14, 1962, and having misappropriated $625 of that firm's money. This account was collected by defendant from a Mrs. Thackeray. Upon this charge the defendant was found not guilty. The second count of this information was the same as the first except as the amount here was $167. This account was collected by defendant from a Mr. Bier. Upon this charge the defendant was found guilty. The third count of this information charged defendant with acting as agent for the Midland Implement Company on or about May 16, 1962, and having misappropriated the sum of $104.63. At the close of the trial the State moved the court to dismiss this count. The motion was granted.

It was stipulated that these causes be consolidated for trial. Cause No. 6422 became Count I; the Thackeray account in Cause No. 6449 became Count II; the Bier account in Cause No. 6449 became Count III; and the Midland Implement account in Cause No. 6449 became Count IV.

Defendant makes three specifications of error. The first is 'That the Court erred in refusing to dismiss the informations * * * for the reasons that there is a fatal variance between the pleadings and the proof * * *.' The second is 'That the Court erred in refusing to dismiss the informations * * * upon the grounds and for the reasons that the evidence was insufficient to sustain the burden of proof as to the requisite intent to steal and to permanently deprive the Montana Reserve Finance Corporation of its money.' The third is 'That the evidence is insufficient to support the verdict.'

R.C.M.1947, § 94-2701, is denominated as our larceny statute. It is divided into two subsections, and covers both the crimes of larceny and embezzlement. Defendant has been convicted on both counts of the crime of embezzlement. 'The crime of embezzlement is based solely on statute and is designed to penalize those conversions which could not be prosecuted at common law as larceny because there was no trespassory taking. In most jurisdictions, this distinction between embezzlement and larceny has been preserred. In some jurisdictions, however, the definition of larceny has been expanded so as to include embezzlement.' II Wharton, Criminal Law, § 514, (Anderson, 1957) pp. 191-192. (Citing Montana as being one of those jurisdictions.)

Such is the case here in Montana. R.C.M.1947, § 94-2701, subd. (1), is the statutory codification of the common-law crime of larceny. Subdivision (2) codifies the crime of embezzlement. These subsections combined now constitute the crime of larceny in Montana.

Defendant's contentions concerning his first specification of error are best reflected in two paragraphs from his own brief, as is set forth below:

'The question presented for consideration then is can the State charge the defendant as an individual with committing a crime as the agent of one corporation [,] in this case the Montana Reserve Finance Corporation [,] where the proof shows that the defendant was in reality the agent of another corporation, namely, the United Businesses, Inc., which itself was not an agent of the Montana Reserve Finance Corporation but at best a bailee as an independent contractor?

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'It is our position therefore that the State having charged the Defendant with larceny committed as an agent of the Montana Reserve Finance Corporation under subdivision 2 of our statute must show that the defendant was such an agent and that if it fails to make such proof and the fact shows that ...