Hitchcock v. State , 47 Ohio App. 90 ( 1933 )

Emory T. Hitchcock was tried upon the charge of embezzlement, and at the close of the state's case made a motion for a directed verdict in his favor, and, that motion being overruled, he offered no evidence and rested, and then renewed his motion for a directed verdict, which was overruled.

The jury found him guilty, and, after his motion for a new trial was overruled, he was sentenced.

We do not attempt to set forth in detail the evidence introduced on behalf of the state; a general outline of the situation presented by such evidence is as follows:

The Abstract Title-Guarantee Trust Company, of Akron, a corporation, had been for many years engaged in the business of preparing abstracts and certificates of title and dealing in mortgages, and the defendant, Emory T. Hitchcock, had, for many years, been one of the managing officers of said company and personally transacted or supervised at least a part, if not a large part, of the company's business having to do with dealing in mortgages.

The company loaned money and took real estate mortgages executed to it, and sold and delivered said mortgages to customers. In such a transaction the printed form of assignment on the mortgage was filled out and then signed in ink (by some two of three officers of the company, one of said three being the defendant), except that the name of the purchaser of the mortgage was written in the blank space on said assignment in lead pencil; a like assignment was made of the note secured by the mortgage; and the purchaser kept possession of said papers, but did not have the assignment of the mortgage recorded. Thereafter the company collected the interest and paid same to the purchaser, and when the note became due, the company either collected the principal and paid it to the purchaser, or sold and transferred another mortgage to the purchaser. If the mortgage was collected by the company, the purchaser delivered his mortgage and the note secured by it to the company, and the company erased the purchaser's name, which was in pencil, on the assignment to him, and crossed out said assignment and executed on said mortgage a cancellation by the company and delivered same to the maker of the mortgage.

Some time in 1925, Ranney P. Frank purchased from the company the note and mortgage of Harvey and Lillian Beardshaw, which were duly assigned and delivered to him, and thereafter the company collected from the makers of said note and paid to said Frank the interest due thereon, and with his consent extended the due date of said note to February 14, 1931.

On February 4, 1931, Frank delivered to the defendant said note and mortgage with the assignments thereon to him, they being in the same condition as when he received the note and mortgage, and directed the defendant to collect for him the amount due upon said note, which then amounted to about $3,000, and the defendant gave to said Frank a receipt for said papers, signed by the company by the defendant as secretary.

At that time the company had sold to the Guarantee Title Trust Company, of Cleveland, its plant and its abstract and guaranty title business and good will, and the Cleveland company had taken over said business and the office of the Akron company.

After such transfer, which was about five years previous to 1931, the Akron company continued to some extent in the mortgage business, transacting its business in the office of the Cleveland company and being under contract with the Cleveland company to liquidate its said mortgage business; the officers of one company were officers in the other company, the defendant being vice president and secretary of the Akron company and assistant vice president and assistant secretary of the Cleveland company; but at the time Frank delivered said mortgage to the Akron company for collection, that company was indebted to banks in large amounts, and was being liquidated by its officers in pursuance of its agreement with the Cleveland company.

The Akron company collected said mortgage belonging to Frank and deposited about $3,000 belonging to Frank in the general bank account of the Akron company, and afterwards used the same in the business of the Akron company.

Checks on said bank account were signed by two of three officers of the company, and the defendant was one of the three.

Said money was collected and appropriated by the Akron company on March 12, 1931. A few days after it had been collected, Frank applied to the defendant for his money, and the defendant said that the note and mortgage had not yet been paid; and like information was given Frank by the defendant on several different occasions during the four months after said note had been paid to the Akron company, at which time Frank learned from the maker of the note that it had been paid at about the time it was due.

Frank immediately informed the defendant of the receipt by him of such information, and the defendant did not deny that the money had been paid, and acted queerly, and offered no explanation of his conduct, but said that it would be all right if Frank would have a little more patience and wait a little longer.

Soon thereafter a receiver was appointed for the Akron company, it having a bank account at that time of $40.73, and Mr. Frank has never received from any one any part of the money the Akron company collected for him.

It must be kept in mind that no evidence was offered to contradict or explain the evidence introduced by the state.

One of the principal errors claimed is the overruling of the motion for a directed verdict; the claim being that there was no evidence tending to prove some of the material allegations of the indictment.

The indictment charged that, as agent for Ranney P. Frank, the defendant received certain moneys belonging to said Frank, which defendant unlawfully and fraudulently converted to his own use.

There is no charge of conspiracy in the indictment, or that said acts were done through a corporation which was a mere instrumentality by which the embezzlement was accomplished; but the indictment, in addition to charging that defendant was the agent of Frank, also charged that, at the time he did the things complained of, he was an officer and employee of both of said corporations.

There was no evidence introduced tending to prove that, as an individual, and separate and apart from his connection with a corporation, he was an agent of Frank, or that as an individual he received money belonging to Frank, or that he converted money belonging to Frank to his own use.

The evidence, which was uncontradicted, did establish that abona fide corporation, of which for many years the defendant had been an influential and important official, did, while acting as agent for Frank, receive said money belonging to Frank, and did unlawfully and fraudulently convert said money to its own use; and the evidence, undenied and unexplained, warranted the jury in finding that the defendant, who was a managing official of the corporation and who had supervision and charge of the particular transaction involved, had full knowledge of such corporation's agency and of the receipt by it of Frank's money and of the conversion of the same to the use of said corporation, and further that the defendant initiated such agency and knowingly signed papers and did other acts necessary to enable the corporation to obtain possession of said money belonging to Frank, and that, after said money had been obtained by the corporation, the defendant, acting as an official of the corporation, concealed from Frank for a long period of time the fact that said money had been obtained, and refused to turn over same to Frank.

Furthermore, there was testimony as to the excuses made by the defendant very soon after the corporation received Frank's money for not paying it to him, and as to excuses made about the same time by defendant to others whose money was similarly received by the corporation for not paying them, and as to the conduct of the defendant when said excuses were made, and there was also evidence as to the corporation owing large sums to banks and in reference to the subsequent failure of the corporation, and evidence that at the time Frank's money was received the corporation had transferred to another corporation the major portion of its business and had ceased the prosecution of its business except in connection with the liquidation of the corporation.

The jury had a right to draw all reasonable inferences from the proven facts, and from the facts herein set forth and other facts, which were not denied or in any manner explained, the jury might reasonably infer that the defendant had full knowledge of the financial condition of said corporation, and that, when the defendant, on behalf of the corporation, arranged with Frank to receive his money and signed the papers necessary for the corporation to obtain said money, the defendant knew that, in the regular course of the corporation's business, the money would be deposited in the bank in the corporation's account and mingled with its funds and converted to its use, and that the circumstances were such as to justify the conclusion that the Akron company was at least unable to pay its liabilities as they became due, and were such as to make it not only reasonably certain but certain beyond a reasonable doubt that Frank would not be reimbursed by the company for the money so taken by it, and that he would lose the same.

In the absence of any evidence by the defendant, or in his behalf, we are of the opinion that the finding of the jury that the foregoing facts and inferences were established beyond a reasonable doubt is not manifestly against the weight of the evidence.

We are also of the opinion that such facts cover all of the material allegations of the indictment.

The general rule is that an officer of a corporation may be held criminally responsible for the embezzlement of the property of a third person through a corporate act, where the act was done by the individual officer or at his direction, or where he is in charge and has authority in the premises and with full knowledge permits the act to be done, or where he personally initiates and takes an active part in a transaction when he knows that, in the usual course of business conducted under his supervision, such transaction is reasonably certain to result in the act being done by an employee of the corporation.

Acts done by a defendant are none the less his acts because he does them on behalf, and as an officer, of a corporation. It is true that the defendant in the case at bar may not have actually received said money and deposited it in the bank, but that was an established routine of business, well known to him and within his authority, which he must have contemplated when, on behalf of the corporation, he agreed to collect said money for Frank and pay the same over to him; the company being liable, not as a debtor, but as a special agent or trustee.

It is true that the evidence does not show which two of the three officers signed the checks disbursing said money for the benefit of the corporation, but the circumstances were such that, in the absence of any denial or explanation by the defendant, he must have known what was likely, if not almost certain, to happen to the money when it was deposited in the corporation's general account in the bank, and such knowledge is also indicated by his subsequent conduct in deceiving Frank as to the receipt of the money, and his conduct with reference to others whose moneys were similarly received at about the same time. The defendant must be held to have intended the natural consequences of his acts, and the jury was justified in finding that his acts constituted a fraudulent conversion of Frank's money when it was mingled with the funds of the corporation, especially when the corporation was in the condition indicated by the evidence.

The fact that the money was not converted to the defendant's personal use does not relieve the defendant from criminal liability for the conversion.

While the indictment did not charge that the defendant performed the acts complained of on behalf of, and as an officer of a corporation, it did describe the transaction complained of with sufficient certainty to inform the defendant of the charge against him and apprise him of what the state proposed to prove, and was therefore sufficient.

Some authorities for one or more of the foregoing propositions are as follows: Commonwealth v. Moore, 166 Mass. 513,44 N.E. 612; Brown v. State, 3 Ohio App. 52; State v. Ross, 55 Or. 450,104 P. 596, 106 P. 1022, 42 L.R.A. (N.S.), 601, 613; Milbrath v. State, 138 Wis. 354, 120 N.W. 252, 131 Am. St. Rep., 1012;State v. Thomas, 123 Wn. 299, 212 P. 253, 33 A.L.R., 781;Lopez v. State, 46 Tex. Cr. Rep., 473, 80 S.W. 1016.

The trial court permitted the state to offer evidence of similar transactions with three other persons who, about the same time, left mortgages with the defendant for collection by said company, and it is urged that this was error; but we are of the opinion that such evidence was competent and that there was no abuse of discretion by the trial court as to the order in which said evidence was received.

It is further urged that it was the duty of the trial judge, at the time such evidence was introduced, whether requested so to do or not, to limit the competency of such evidence to the specific intent charged in the indictment, by instructing the jury to that effect, and, as the trial judge did not do so, that prejudicial error was committed. In the case at bar, the court was not requested to so instruct the jury at the time the evidence was introduced, and the court did not do so at that time, but in the general charge the court did properly charge the jury as to the purpose for which said evidence was admitted.

The contention of the defense is based upon the cases of State v. Davis, 90 Ohio St. 100, 106 N.E. 770, and Baxter v. State,91 Ohio St. 167, 110 N.E. 456, where language was used which would seem to justify the conclusion claimed. But the case ofMiller v. State, 101 Ohio St. 535, 130 N.E. 939, which reversed the judgments of the lower courts upon authority of the two cases hereinbefore referred to, we find, upon investigation of the printed briefs in the Supreme Court, which included a copy of the Court of Appeals opinion in the case, was probably not a case where the court simply failed to instruct the jury at the time the evidence was introduced but did properly instruct the jury in the general charge.

In the case of Patterson v. State, 96 Ohio St. 90,117 N.E. 169, L.R.A., 1918A, 583, it was stated in the opinion, in reference to this subject, as follows:

"It would be a sufficient compliance by the court if during its admission it admonished the jury as to the effect of evidence relating to similar offenses, or if it later so limited such evidence in its general charge."

The opinion further differentiates the first two cases mentioned.

Then, in the case of Barnett v. State, 104 Ohio St. 298,135 N.E. 647, 27 A.L.R., 351, the proposition was stated in the syllabus of the court as follows:

"2. The trial court at the time of the introduction of such evidence, or in its general charge, should limit the application of such evidence by the jury to such purpose."

And in the case of Lyon v. State, 116 Ohio St. 265,155 N.E. 800, the trial court limited the consideration by the jury of such evidence in its general charge and mentioned the subject twice therein, and the court held that that was sufficient.

In the case at bar we are of the opinion that there was no prejudicial error committed by the trial court in not limiting such testimony at the time it was introduced; the court not having been requested so to do.

It is also urged that it was error for the court to charge upon the subject of circumstantial evidence, because there was no such evidence in the case, and we find that there is no basis for such claim.

Other claims are made as to errors in the charge; but it is apparent from what we have said in reference to the criminal responsibility of an officer of a corporation that we find against such claims.

Furthermore, we find no prejudicial error in the court's refusal to charge in the language of the requests to charge made by the defendant. In so far as they stated sound propositions of law applicable to the case, they were covered in the charge of the court.

Having reached the conclusion that the trial of the defendant was free from prejudicial error, we discharge our duty by affirming the judgment.

Judgment affirmed.

FUNK and STEVENS, JJ., concur.