Wood v. Commonwealth

• Decision Date: 14 May 1929
• Parties: WOOD v. COMMONWEALTH.
• Court: Kentucky Court of Appeals

17 S.W.2d 443

229 Ky. 459

WOOD v. COMMONWEALTH.

Court of Appeals of Kentucky

May 14, 1929

Appeal from Circuit Court, Jefferson County, Criminal Branch Criminal Division.

George T. Wood, Jr., was convicted of converting money, property, or other thing of value without the consent of the owner, and he appeals. Affirmed.

Logan J., dissenting.

Arthur Bensinger, James P. Edwards, Trabue, Doolan, Helm & Helm, and Booth & Conner, all of Louisville, for appellant.

J. W Cammack, Atty. Gen., and Jas. M. Gilbert, Asst. Atty. Gen., and George J. Mayer, Asst. Com. Atty., and Joseph S. Lawton, both of Louisville, for the Commonwealth.

STANLEY C.

The appellant, George T. Wood, Jr., appeals from a judgment sentencing him to serve two years in the penitentiary for violating section 1358a of the Statutes, which provides punishment for "any person who shall * * * dispose of or convert to his or her own use or the use of another, any money, property, or other thing of value without the consent of the owner thereof."

The indictment charges the appellant and his brother, Richard V. Wood, with conversion of a certain certificate for 20 shares of stock of the Standard Oil Company of Indiana belonging to James A. McGinnis, the "certificate being in the name of Thomson & McKinnon, the same having been duly assigned in blank by the said Thomson & McKinnon, then and there bearing the endorsement in blank and the signature of the said Thomson & McKinnon on the back thereof, when so endorsed and signed the same being then and there of the value of approximately $1,350.00."

1. The appellant contends that the statute under which he was convicted had been repealed by the act which is now incorporated in our statutes as section 1358b. The latter enactment did not have such effect. It merely supplements the first statute. The reasons for this conclusion are given in an opinion this day delivered in the case of the appellant's brother and former partner, styled Richard V. Wood v. Commonwealth, 17 S.W.2d 440, to which reference is made.

2. It is further contended that the indictment was demurrable because it charged the defendant with the conversion of a certificate of stock, and such instrument is not property or money or other thing of value; that it is merely the evidence of the ownership of shares of stock in the corporation-not the shares themselves. Strictly and technically speaking, that is correct. Nevertheless, a certificate of stock, indorsed and signed in blank by the one to whom issued, ordinarily passes by delivery the title to the stock it represents. If the certificate had not been indorsed in such a way as to be transferable by delivery, and the signature of the owner was required before a transfer could be effected, there would be much force in the argument.

"Property" is a diversified term, and includes any species of right. See section 732, Civil Code, and Caldwell's Dictionary, title "Property." Sea v. Conrad, 155 Ky. 51, 159 S.W. 622, 47 L. R. A. (N. S.) 1074, Ann. Cas. 1915C, 318; Raydure v. Board of Supervisors, 183 Ky. 84, 209 S.W. 19; Fayette Realty & Finance Co. v. Commonwealth, by, etc., 17 S.W.2d 722 (decided March 22, 1929, not yet [officially] reported). In Brown v. Vancleave, 21 S.W. 756, 14 Ky. Law Rep. 821, it was held that an action can be maintained for the specific recovery of a certificate of stock. See, also, Harvey v. Bank of Marrowbone, 178 Ky. 793, 200 S.W. 28; Will's Adm'r v. Geo. Wiedermann Brewing Co., 171 Ky. 681, 188 S.W. 778, Ann. Cas. 1918E, 62.

In Simpson v. Jersey City Contracting Co., 165 N.Y. 193, 58 N.E. 896, 55 L. R. A. 796, it is said: "The distinctions [between the certificate and the stock] sought to be drawn, are largely, artificial. The truth is that it did have property here, in the common acceptation of the term, as well as in the eye of the law. Certificates of stock are treated by business men as property for all practical purposes. They are sold in the market, and they are transferred as collateral security for loans, and they are used in various ways as property."

In Daggett v. Davis, 53 Mich. 35, 18 N.W. 548, 51 Am. Rep. 91, Chief Justice Cooley thus expressed his views: "But we see no reason why, if the shares are converted by means of a wrongful use of the certificate, the owner in suing may not count upon the conversion of either. The shares are the property converted, but the certificate itself is also property; standing as it does as the representative of the shares, and as its conversion may take the shares from the owner, it seems to be as proper to count upon its conversion as upon the conversion of money or any chattel."

The text in 14 C.J. 479, thus classifies such an instrument: "It has been said that a certificate of stock, being merely the symbol or paper evidence of the ownership of shares of stock, is not in itself property and has no intrinsic value disconnected from the stock which it represents; but as it undoubtedly has a value in itself as a transferable symbol of property and evidence of the holder's right and title as a stockholder, like a negotiable instrument, it has often been held to be in itself property as representing the stock and so treated for many purposes. The certificate of stock as distinguished from the shares of stock which it represents, is not only property, but is tangible personal property."

The general classification of a certificate of stock was expressed in Sargent v. Whitfield & Co., 226 Ky. 754, 11 S.W.2d 926, without extension. But that was a civil action for the recovery of the value of stock from holders with notice.

We are of the opinion that a certificate of stock as the evidence of ownership or symbol of property comes within the definition of "property" used in this statute, and may be the subject of embezzlement and conversion under the statute. Bass v. Commonwealth, 222 Ky. 310, 300 S.W. 866; People v. Williams, 60 Cal. 1. But we are not restricted to that classification in testing the indictment, for undoubtedly a certificate of stock indorsed in blank is included in the comprehensive term "other thing of value," used in the statute.

The particular certificate involved and described in this indictment was a "thing of value," costing McGinnis $1,338.50. He paid appellant and his partner that much money for it. It had value sufficient to enable appellant's firm to secure in part credit for $2,500 at their bank and with their brokerage correspondent. As the evidence disclosed, McGinnis lost nearly $1,350 by reason of being deprived of this certificate, and it would be hard to convince him that it was not a thing of value. We do not make these references to bring the evidence to bear in testing the indictment, but merely by way of illustration or suggestion that a certificate of stock thus described is a "thing of value." It would be hypertechnical, indeed, to hold that the stock certificate described was not the subject of embezzlement nor contained within the purview of the statute.

The indictment sufficiently and properly accused the defendant with the commission of a crime, and the court did not err in overruling the demurrer to it.

3. Counsel for appellant forcefully argue that the evidence introduced in the case did not prove appellant guilty. Counsel for appellee with equal ability present the converse argument. The appellant and his brother, Richard V. Wood, and Robert B. McDowell composed the partnership of George T. Wood & Son, engaged in the stock and bond brokerage business in the city of Louisville. McDowell's interest was very limited. By the terms of the partnership agreement he had no right to inspect the books of the firm, and was otherwise restricted in his relations. He simply had a drawing account as a salary, and was entitled to a limited share in the profits as additional compensation for his services as a salesman. It may well be doubted whether he was a real partner. See 20 R. C. L. 823, et seq.; 3 R. C. L. Supplement, 1104; 4 R. C. L. Supplement, 1379; and Stephens v. Neely, 161 Ark. 114, 255 S.W. 562, 45 A. L. R. 1236. The Wood brothers owned, controlled, and dominated the firm, and personally conducted its business.

The evidence shows that James A. McGinnis, a resident of Lawrenceburg, Ky. some time in April, 1927, in a long-distance telephone conversation with appellant, George T. Wood, Jr., authorized the purchase for his account of 20 shares of stock of the Standard Oil Company of Indiana at $66.75 a share. McGinnis received confirmation of the purchase, and promptly on April 21st sent his check for $1,338.50, payable to George T. Wood & Son. On the 22d acknowledgment was made of the receipt of remittance in payment of the stock. This letter bore the initials "R. V. W.," apparently being dictated by appellant's brother. Having heard nothing more from his remittance, and not having received the certificate of stock, on June 14th McGinnis called appellant by telephone with reference to it, and afterwards received a letter written by the appellant advising him that "through an oversight the 20 shares of Indiana in question had not been ordered out," and stating that it had that day been ordered out, and would be forwarded within the next two days. On June 15th, with a letter written by appellant, certificate No. E59121 for 20 shares of stock in the Standard Oil Company of Indiana, standing the name of Thomson & McKinnon, New York correspondents of appellant's firm, was sent to McGinnis. In this letter appellant wrote: "If you wish this stock placed in your name we will be pleased to affect (sic) the transfer if you will return the stock to us." On June 16th he returned the certificate by registered mail to George T. Wood & Son. The postal return receipt, dated June 17th, is signed...