United States v. Summers

• Decision Date: 20 May 1927
• Citation: 19 F.2d 627
• Parties: UNITED STATES v. SUMMERS.
• Court: U.S. District Court — Western District of Virginia

19 F.2d 627 (1927)

UNITED STATES v. SUMMERS.

District Court, W. D. Virginia.

May 20, 1927.

J. C. Shaffer, U. S. Atty., of Roanoke, Va., and C. E. Gentry, Asst. U. S. Atty., of Charlottesville, Va.

Hutton & Hutton and H. E. Widener, all of Abingdon, Va., for defendant.

McDOWELL, District Judge.

The defendant, guardian of an infant beneficiary of the estate of a deceased World War veteran, was indicted under the statute hereinafter quoted. 43 Stat. 1312 (U. S. Code, tit. 38, § 556 Comp. St. § 9127½ — 505). The facts in the case are as follows:

The defendant had used for his private purposes a very considerable part of a fund of several thousand dollars which had been paid to him in his official capacity. However, he at all times intended to restore the money, and had reasonable expectations at the time of the conversion of being financially able to make restoration. The defendant's counsel from the first contended that the facts do not justify a conviction. Government counsel entertained some doubt on the subject, and, being anxious to avoid the expense of what might be a useless trial, requested that I advise them of my construction of the statute. The following opinion was accordingly written and resulted in a nolle.

It may be here said that the language of the above-mentioned statute was apparently taken from a pension statute of 1873. 17 Stat. 566, 575. However, I have not found any opinion in which the old statute is construed in respect to the point here involved.

The numbers and the italics having been supplied, section 20 of the Act of March 4, 1925, c. 553 (43 Stats. 1302, 1312), reads as follows:

"Sec. 20. That a new section be added to the World War Veterans Act 1924, approved June 7, 1924, to be known as section 505, and to read as follows:

"`Sec. 505. Every guardian, curator, conservator, committee, or person legally vested with the responsibility or care of the claimant or his estate, having charge and custody in a fiduciary capacity of money paid, under the War Risk Insurance Act as amended, or under the World War Veterans Act, 1924, for the benefit of any minor or incompetent claimant, who shall (1) embezzle the same in violation of his trust or (2) fraudulently convert the same to his own use, shall be punished by fine not exceeding $2,000 or imprisonment at hard labor for a term not exceeding five years, or both.'"

It will probably be conducive to clearness to consider first the meaning of the word "fraudulently" as used in clause No. 2 of the statute. The word "fraud," as commonly used implies deceit, deception, artifice, trickery. But the persons who are alone within the purview of this statute are fiduciaries who rightfully have possession of the trust funds, and who have no reason for practicing any deception or artifice in converting such funds to their own use. It seems therefore that the word "fraudulently" was used in some sense other than its most usual signification. In seeking the meaning that was most probably intended, it seems to me that the word was used as meaning conversions made with intent to deprive the beneficiary of the money permanently, or at least until restoration should be compelled.

It is an unwise practice for any trustee to convert to his own use any part of a trust fund, however small the sum thus used, and however certain he may be that he can and will make restoration in due time. Such misuse of small trust funds is, I believe, quite common among the class of inexperienced and untrained people usually willing to act as trustees of small funds. The members of Congress must have known that a very great number, probably the great majority, of those who would be trustees in possession of the usually rather small sums of money paid to fiduciaries under the War Risk Insurance Act (Comp. St. § 514a et seq.), or under the World War Veterans Act, 1924 (Comp. St. § 9127½ — 1 et seq.), would be people of little or no experience or training as fiduciaries, and therefore of the class most likely to innocently convert to their own use portions (usually rather insignificant in amount) of trust funds. And it seems therefore most improbable that the lawmakers intended to declare guilty of a felony a trustee who converts possibly some...