State v. Rud
| Decision Date | 14 July 1926 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Cass County, Englert, J.
Defendant was convicted of embezzlement. From an order of the district court denying his motion for a new trial and from the judgment of conviction, he appeals.
Reversed and a new trial ordered.
Order and judgment reversed and a new trial ordered.
W. H Barnett, for appellant.
State v. Wallick (Iowa) 54 N.W 246.
H. F Horner, State's Attorney, and V. R. Lovell, Assistant State's Attorney, for respondent.
"The crime of embezzlement may be committed by a fraudulent failure to account for funds as well as by physical confiscation." State v. Bickford, 28 N.D. 36.
"It is necessary to allege a demand upon the defendant to pay the money or return the property, and his refusal to do so, only when the statute makes such demand and refusal elements of the crime." Arizona v. Munroe, 10 Ariz. 53, 85 P. 651.
The defendant William Rud was convicted in the district court of Cass county of the crime of embezzlement as defined in § 9931, Comp. Laws 1913. His motion for a new trial was denied and judgment was entered on the verdict. He appeals from the order denying such motion and from the judgment.
In December 1919, the defendant William Rud promoted and organized the Great Northern Fuel and Material Company, a North Dakota corporation. In January 1920, Rud was elected president, treasurer and manager of the corporation. Its business was the buying and selling of fuel and building material. Rud's salary as manager was fixed at $ 150 a month and 15 per cent of the net earnings of the concern. He continued as president, treasurer and manager during the years 1920, 1921 and 1922. The annual stockholders' meetings were held in the month of January. At the annual meeting held in January 1921, Rud made reports as to the financial condition of the corporation and as to the business transacted in 1920. He did the same in 1922 for the year 1921 and in 1923 for the year 1922. He made in each instance two statements, one purporting to show the financial condition of the concern generally, and the other purporting to show the business done during the preceding year. This latter statement purported to show the fuel and material bought and sold, the expenses of conducting the business and the net earnings; that is, the excess of receipts from sales of merchandise over the cost thereof and the expense of carrying on the business. This latter statement was the one which was used in determining Rud's commission on net earnings. Each year this report showed net earnings, and each year Rud claimed and was allowed 15 per cent of the net earnings as shown by such reports. Rud was in charge of the office and books of the company. The bookkeeping was done by him or under his direction. Apparently there never was an audit of his accounts until after a meeting of the stockholders in January 1924. It was then discovered that the corporation was hopelessly insolvent. Complaint was made to the state's attorney of Cass county and a warrant was issued for Rud's arrest on a charge of embezzlement. The specific charge was that of embezzling $ 241.35, the amount claimed by Rud as commission on the net earnings for 1922, and which as treasurer and manager of the corporation he had paid to himself out of the funds of the company.
The state predicated its case on the theory that Rud falsely and fraudulently represented that the business of the company for the year 1922 resulted in net earnings of $ 1,609.82; that Rud claimed, took and retained a commission of 15 per cent of that amount, or $ 241.35; that in fact there were no net earnings for the year in question and that Rud was entitled to no commission. The cause was tried and submitted to the jury on this theory.
The defendant admitted that he claimed and received the item of $ 241.35 as commission on net earnings of the company for the year 1922. He grounded his defense on two propositions First, that the company made net earnings in 1922 in the amount as claimed by him of $ 1,609.82 and the commission thereon was authorized by a vote of the directors of the corporation. Second, that even though net earnings in the amount of $ 1,609.82 had not been earned, nevertheless, he made the claim for and received the commission thereon openly and avowedly and in good faith. Consistently with these contentions the defendant on this appeal challenges: (1) The sufficiency of the evidence to sustain the verdict; (2) The propriety of certain rulings of the trial court on questions...
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