State v. Whitehurst

• Decision Date: 03 November 1937
• Docket Number: 289.
• Parties: 212 N.C. 300, 113 A.L.R. 740 v. WHITEHURST. STATE
• Court: North Carolina Supreme Court

193 S.E. 657

212 N.C. 300, 113 A.L.R. 740

STATE v. WHITEHURST.

No. 289.

Supreme Court of North Carolina

November 3, 1937

Appeal from Superior Court, Craven County; J. Paul Frizzelle, Judge.

Henry P. Whitehurst, as receiver of the Bank of Vanceboro, was indicted for embezzlement, and from a judgment quashing the indictment, the State appeals.

Affirmed.

The rule of strict construction does not mean that a statute should be stintingly or even narrowly construed, but it means that everything shall be excluded from its operation which does not clearly come within scope of language used.

Criminal prosecution in which the defendant as receiver of the Bank of Vanceboro is charged with embezzlement.

The indictment charges that in May, 1924, the defendant was duly appointed receiver for the Bank of Vanceboro, a State banking institution, and that, as such, in the exercise of a public trust and as agent, consignee, clerk, employee, and servant of the court and of the depositors, stockholders, and creditors of the insolvent bank, he was entrusted with and did receive and take into his possession and have under his care large sums of money, to wit, $14,547.94, the property of said receivership, which the said Henry P. Whitehurst (being over the age of 16 years) did feloniously embezzle fraudulently misaply, convert to his own use, etc., against the form of the statute in such case made and provided, and against the peace and dignity of the State.

Before pleading to the indictment, the defendant, through counsel entered a demurrer and moved to quash upon the ground that a receiver is not covered by the embezzlement statute.

From judgment of quashal, the State appeals, assigning error.

A. A F. Seawell, Atty. Gen., and Harry McMullan, Asst. Atty. Gen., for the State.

A. D. Ward, L. I. Moore, W. B. R. Guion, and R. E. Whitehurst, all of New Bern, for appellee.

STACY Chief Justice.

Does the fraudulent misapplication of receivership funds by the receiver of a State bank come within the purview of the embezzlement statute, C.S. § 4268? We agree with the trial court that a receiver of an insolvent corporation is not within the terms of the statute.

A receiver is not eo nomine mentioned in the statute, and it is not thought that the language is broad enough to include a receiver of an insolvent corporation under the rule of ejusdem generis. See Calkins v. State, 18 Ohio St. 366, as reported in 98 Am.Dec. 121, with valuable note covering the whole subject.

As a forerunner to the embezzlement statute, provision was made in the Revised Code of 1854, chap. 34, § 18, for punishment at the whipping post of any servant who withdrew from his master and went away with any money, goods, or other chattels, of the value of $5, to him entrusted by his master, with intent to steal the same, or who, being in the service of his master, embezzled any such money, goods, or other chattels, or otherwise converted the same to his own use, contrary to the trust and confidence in him reposed. (Brought forward in Battle's Revisal, c. 32, § 16.) See State v. Lanier, 88 N.C. 658; Id., 89 N.C. 517.

Then, in 1872, by Act of Assembly, adopted February 8 of that year, it was enacted: "If any officer, agent, clerk or servant of any corporation, or any clerk, agent or servant of any person or copartnership (except apprentices and other persons under the age of sixteen years) shall embezzle or fraudulently convert to his own use, or shall take, make away with or secrete, with intent to embezzle or fraudulently convert to his own use any money, goods or other chattels, * * * belonging to any other person or corporation which shall have come into his possession or under his care by virtue of such office or employment, he shall be deemed guilty of felony, and upon conviction thereof, shall be punished as in cases of larceny." Chapter 145, § 2, Pub.Laws 1871-72. This is known as the embezzlement statute, and it appears in Battle's Revisal (1873) as chapter 32, § 136. It was brought forward as section 1014 in the Code of 1883.

In 1889, the section was amended by adding "consignee" to the persons designated, and enlarging its scope by inserting after the word "fraudulently" wherever it appears, the words "or knowingly and wilfully misapply or." Chapter 226, Public Laws 1889.

Following the decision in State v. Connelly, 104 N.C. 794, 10 S.E. 469 (Fall term, 1889), in which it was held that a "clerk of the superior court" was not within the terms of the statute, the section was again amended making it applicable to any "public officer, clerk of the superior or other court, sheriff or other person or officer exercising a public trust or holding public office." Chapter 188, Pub.Laws 1891.

In 1897, the section was further amended so as to embrace "Guardians, Administrators, and Executors." Chapter 31, Pub.Laws 1897.

With these amendments added, the statute was brought forward as section 3406 in the Revisal of 1905. It now appears as section 4268 in the Consolidated Statutes of 1919. (In the Code of 1883 the word "employee" appeared in the statute, but this has been eliminated in subsequent compilations. Similarly, the words "or copartnership" were omitted beginning with the Revisal of 1905, and the exception as to "apprentices" does not appear in the Consolidated Statutes of 1919, as the law on apprentices was repealed by chapter 97, Pub.Laws 1919.)

Lastly, by amendment in 1931, the statute was made applicable to any "trustee" who embezzles the funds of his cestui. Chapter 158, Pub.Laws 1931.

Hence, in its present form, the statute applies to "any person exercising a public trust or holding a public office, or any guardian, administrator or executor, trustee, or any officer or agent of a corporation, or any agent, consignee, clerk or servant, except persons under the age of sixteen years, of any person." C.S. § 4268, as amended by Pub.Laws 1931, c. 158.

Thus, it will be seen that, by repeated amendments, the scope of the statute has been gradually enlarged and its base progressively broadened. But at no time has it been made applicable, ipsissimis verbis, to receivers of insolvent corporations. Nor does it appear, under the rule of strict construction (25 R.C.L. 1076), that the statute is susceptible of the interpretation inclusive of such receivers.

By the rule of strict construction, however, is not meant that the statute shall be stintingly or even narrowly construed ( State v. Earnhardt, 170 N.C. 725, 86 S.E. 960), but it means that everything shall be excluded from its operation which does not clearly come within the scope of the language used. U.S. v. Wiltberger, 5 Wheat. 76, 5 L.Ed. 37. Criminal statutes are not to be extended by implication or equitable construction to include those not within their terms, for the very obvious reason that the power of punishment is vested in the legislative, and not in the judicial, department. It is the General Assembly which is to define crimes, and ordain their punishment. Jennings v. Commonwealth, 109 Va. 821, 63 S.E. 1080, 21 L.R.A. (N.S.) 265, 132 Am.St.Rep. 946, 17 Ann.Cas. 64. Compare State v. Humphries, 210 N.C. 406, 186 S.E. 473, and State v. Bell, 184 N.C. 701, 115 S.E. 190.

The embezzlement statute begins by defining the classes of persons who may fall within its condemnation, or who may commit the statutory crime of embezzlement, and, as it is a penal statute, creating a new offense, it cannot be extended by construction to persons not within the classes designated. 2 Bishop, Crim.Law, § 331. In other words, if the statute be so worded as not to include the defendant, his office, or his status, an indictment thereunder will not lie against him. State v. Keith, 126 N.C. 1114, 36 S.E. 169; Calkins v. State, supra.

A receiver is usually denominated an officer of the court, an "arm" or "hand" of the court, but he holds no public office. Baird v. Lefor, 52 N.D. 155 201 N.W. 997, 38 A.L.R. 807; 23 R.C.L. 7; 22 R.C.L. 398. Nor is he engaged in exercising a public trust. People v. Showalter, 126 Cal.App. 665, 14 P.2d 1034. He is not an agent within the meaning of the embezzlement statute. State v. Hubbard, 58 Kan. 797, 51 P. 290, 39 L.R.A. 860. "The term 'agent of a bank' would ill describe the office of receiver." Mr. Justice Brandeis in U.S. v. Weitzel, 246 U.S. 533, 38 S.Ct. 381, 382, 62 L.Ed. 872. Nor is he a trustee in the sense...