State v. Smith.

Decision Date13 April 1944
Citation37 A.2d 246
PartiesSTATE v. SMITH.
CourtMaine Supreme Court



Appeal and Exceptions from Superior Court, Androscoggin County.

Parker B. Smith was convicted of larceny by embezzlement, and he appeals and brings exceptions.

Exceptions overruled, appeal dismissed, and judgment entered for the state.


Armand A. Dufresne, Co. Atty., and Frank T. Powers, both of Lewiston, for the State.

Berman & Berman, of Lewiston, for respondent.

HUDSON, Justice.

The respondent, convicted under R.S. 1930, Chap. 131, See. 10, comes to this court on appeal and exceptions. This statute provides in part:

“Whoever embezzles, or fraudulently converts to his own use, or secretes with intent to embezzle or fraudulently convert to his own use, money, goods or property delivered to him, or any part thereof, which may be the subject of larceny, shall be deemed guilty of larceny, and shall be punished accordingly.”

By its enactment “a peculiar species of larceny” was created “where the felonious taking is wanting.” State v. Stevenson, 91 Me. 107, 111, 39 A. 471, 472.

The indictment contained no counts for ordinary larceny and the presiding justice instructed the jury that no conviction for such could be found, not only for its non-inclusion, but because there was not sufficient proof of an original felonious taking of the property.

Although there were other counts in the indictment, the respondent was convicted only on Count 1 charging statutory larceny of twenty-five $1,000 Alabama Power Company bonds, hereinafter called Alabama bonds, and on Count 3 charging the same of ten $1,000 Pennsylvania Electric Company bonds, hereinafter called Pennsylvania bonds.

While the record is voluminous, there was little conflict as to what was actually done by the respondent, but sharp issue was taken as to whether he acted either fraudulently or with felonious intent.

The defense was twofold: first, that the respondent did only what he had a legal right to do, and second, that if he had no such legal right, he acted in good faith, believing he had such, and possessed no felonious intent.

At the time of her death on December 11, 1941, these bonds were owned by Ella M. Foss, an elderly lady who lived in the city of Auburn. She left a testate estate of approximately $1,500,000, a large part of which consisted of securities.

For many years she had been well acquainted with the respondent, whose general business was that of banking. He had assisted her in her financial affairs and particularly with regard to the clipping and collection of her bond coupons. For some time, however, a Mr. Treat, whose business office was in Boston and who had been with E. H. Rollins and Sons, advised her as to investments and collected her coupons, receiving them either from the respondent or Mrs. Foss, and then remitted to her by check.

There was also a Mr. Comins of Dorchester, Massachusetts, a certified public accountant, who kept ledger accounts, anyway of her bond transactions. Both Mr. Treat and Mr. Comins had complete lists of bonds owned by her at the time of her decease.

Mrs. Foss kept many, if not all, of her securities in her safety deposit box in the First National Bank in Auburn.

The respondent testified that in 1938 he and Mrs. Foss talked about his getting into some business with her financial assistance, but nothing was done about it until months afterwards following his investigation of some oil business in Texas. Then he claims that on May 5, 1939 she loaned him the Pennsylvania bonds with other securities, and later, on April 22, 1940, the Alabama bonds, also with other securities, with the right to use these bonds as collateral for loans he might make from banks and with the further right to use the money so obtained to establish himself in business.

The respondent also testified he gave receipts to Mrs. Foss on account of these two loans. They appear in evidence as State's Exhibits 7 and 9. Exhibit 7 reads as follows:

“Auburn, Maine

May 5, 1939.

“Received from Mrs. Ella M. Foss of Auburn, Maine, as a loan to be returned six months after demand, with interest, to be computed on the collateral value of the securities used the following securities:

                ¦“$10,000.¦Pennsylvania Electric Co., First & Re Mort. 5% due 1962  ¦
                ¦10,000.  ¦Brooklyn Union Gas Co., General Mort. 5% due 1957        ¦
                ¦15,000.  ¦New England Tel. & Tel. Company First Mort. A 5% due 1952¦
                ¦15,000.  ¦Indiana Hydro-Electric Power Co., First Mort. 5% due 1958¦
                ¦$50,000. ¦Total                                                    ¦

Parker B. Smith

Exhibit No. 9, dated April 22, 1940, is of like tenor and includes the $25,000 Alabama Power Company bonds. It also appeared that there were three other loans of securities claimed to have been evidenced by like receipts.

The total amount of all of these claimed loaned securities at par value was $451,000, of which it seems $58,000 were returned, so that on July 10, 1942, following Mrs. Foss' death, he owed the estate a balance at par of $393,000. However, we are concerned particularly with the Pennsylvania and Alabama bonds, the statutory larceny of which he was convicted.

The respondent together with a Mr. Freeman and Judge Pulsifer were named executors in her will. They qualified January 13, 1942. At the time of her death the Pennsylvania bonds were pledged with the State Street Trust Company of Boston to secure his personal loan. The Alabama bonds, although they had been pledged previously, were then unpledged and were in his deposit box in a bank in New York.

The Alabama bonds, called for payment on March 10, 1942 at 101, were sent by him to Coffin & Burr for collection. The call money at his direction was used in the purchase for him of a like amount of Green Mountain bonds, which later he sold to Coffin & Burr, who sent two checks to him in payment therefor. Payment on said checks, however, was stopped because of a news item that appeared in a Boston paper, which raised a question with them as to his actual ownership of the bonds. Eventually these checks were paid following certain additional endorsements by the estate's executors and thus, according to the bill of exceptions, “The bulk of the proceeds of the sale of the Green Mountain Bonds was subsequently repaid to the Estate.”

The Pennsylvania bonds likewise were called on April 11, 1942 at 105. They were withdrawn from pledge in the State Street Trust Company by the respondent on May 1, 1942, and sent in for collection. This call money was paid to him and he admitted that he used it in connection with his privately owned plastic business in Long Island, New York.

It also appeared that the respondent's co-executors, Freeman and Pulsifer, had no knowledge as to the claimed Foss and Smith agreement, or the above-mentioned receipts, or the disposition of the bonds and the use of the call money by him until some six months following their qualification as executors. On July 8, 1942, the co-executors, together with the respondent's secretary, Miss Parker, met at the First National Bank in Auburn (Mr. Smith not then being in town) and opened the Foss deposit box, to which Mr. Freeman had the key. They then were led to believe that some bonds were missing. Two days later, on the tenth, they met again at the bank and this time Mr. Smith was with them. Freeman and Pulsifer had lists of the Foss securities which they had obtained from either Treat or Comins. On that day they were there to clip coupons to be sent in for collection. There then appeared clipped New England Tel. and Tel. coupons produced by the respondent, but without any corresponding bonds in the box. Upon inquiry he said he had clipped these coupons by mistake the last time he was there. The co-executors expressed their intention to check the bonds in the box with their lists, whereupon, they testified, the respondent sent his secretary out of the room, saying she knew nothing about something he was going to tell them. Immediately, taking his brief case, he went into another room in the bank, but returned a short time later with his case and some envelopes in his hand, in one of which envelopes, so the co-executors said, the receipts were enclosed. The respondent, however, testified that he left the room to get some carbon paper and that he sent his secretary out to complete the detail of making up the cerificates preparatory to sending the coupons in for collection. He denied that he brought back the receipts in those envelopes, but said in effect that on that day in their presence he had taken the envelope containing the receipts out of the deposit box. Anyway, it was then for the first time the respondent told his co-executors that Mrs. Foss had loaned him any bonds and that he had receipted for them, and this information was not divulged until he knew they were about to check her bonds with their lists. Even then he did not tell them that he had already collected the call money on the Alabama and Pennsylvania bonds and had spent it for his own benefit.

The respondent did not deny that he withheld this information, but attempted to excuse it by asserting that he desired to use the proceeds of the Pennsylvania bonds to protect his plastic business in which he then had great faith, so that in due time, with orders from the General Electric in mind, he could pay up his total indebtedness to the banks and then return the securities to the estate. He testified that he thought that he...

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