State v. Alexander , 140 S.C. 325 ( 1927 )

I am unable to agree with the opinion of Mr. Justice Blease in this case and will state the grounds of my dissent. This is an indictment under Section 459 of the Criminal Code, against the defendant, for embezzlement, while acting as County Treasurer of Oconee County. He was tried before his Honor, Judge Bonham, convicted and sentenced, and has appealed to this Court. The statute under which the indictment was presented reads thus:

"All officers * * * charged with the safekeeping, transfer and disbursements of any public funds, who shall embezzle the same, shall be deemed guilty of felony. * * * Provided, however, that the General Assembly * * * may remove the disability upon payment in full of the principaland interest of the sum embezzled."

The definition of embezzlement by Mr. Black, quoted in the opinion of Mr. Justice Blease, is exceedingly clear:

"The fraudulent appropriation to his own use or benefit of property or money intrusted to him by another, by a clerk, agent, trustee, public officer, or other person acting in a fiduciary capacity."

The observation of Mr. Justice Blease is equally clear and correct:

"Reading our statute, with Mr. Black's definition in mind, it appears then that our legislative enactment, succinctly stated, makes it a felony for one charged with the safekeeping and disbursement of public funds to fraudulently appropriate to his own use or benefit any of the funds intrusted to him." (Italics added.)

I think that there is a clear distinction between embezzlement of property and the embezzlement of money. Many cases may be cited holding that an indictment for the embezzlement of the one is not sustained by proof of the embezzlement of the other. State v. Paulson, 27 S.D., 24; 129 N.W., 558. People v. Meseros, 16 Cal.App. 277;116 P., 679. State v. Mispagel, 207 Mo., 557; 106 S.W. 513.Peters v. State, 12 Ala. App. 133; 67 So., 723. People v.Bartnett, 15 Cal.App. 89; 113 P., 879. People v. Davis,269 Ill., 256; 110 N.E., 9. People v. Day, 185 Mich., 68;151 N.W., 640. Hampton v. State, 99 Miss., 176;54 So., 722. State v. Harcomb, 48 Utah, 89; 158 P., 1096.State v. Horne, 62 Utah, 376; 220 P., 378. State v. Peck,299 Mo., 454; 253 S.W. 1019. State v. Hudson,93 W. Va., 435; 117 S.E., 122. State v. Casleton, 255 Mo., 201;164 S.W. 492.

It is clear from the words of the statute that the embezzlement declared a felony therein is the fraudulent appropriation of money, not any other species of property as a check or warrant would be. The statute not only specifically refers to public funds in the hands of the officer for disbursement, which could only mean money, but in the proviso the defaulter is permitted to apply to the General Assembly for the removal of the disability to hold office, consequent upon his conviction, "upon payment in full of the principaland interest of the sum embezzled," which as a matter of course could refer only to money.

We naturally look to, and the defendant is entitled to be tried upon, the allegations of the indictment purporting to charge him with a crime. "All of the elements of or facts necessary to the crime charged must be fully and clearly set out." 31 C.J., 650. "The Legislature, while it may simplify the form of an indictment or information, cannot dispense with the necessity of placing therein a distinct presentation of the offense containing allegations of all its essential elements."Id., 651.

The Solicitor has manifestly attempted to comply with this rule, in formulating the present indictment, which sets forth specifically and in detail the facts which in his judgment have constituted the offense of embezzlement, in substance, as follows: That on September 30, 1924, while County Treasurer and intrusted with the care, keeping, and possession of large sums of money, the property of Oconee County, the defendant committed the crime of embezzlementin the following manner: That he made out, swore to, and filed with the Clerk of the County Board, a false claim against the county for $10,235.33, claiming that it was for reimbursement to him of that amount paid by him to the Enterprise Bank in September, 1915, when he knew that the county had already reimbursed him therefor, and owed him nothing on that account; that upon said claim he had received from the Clerk of the County Board a county check for said amount, which was received by and credited to the defendant; that the defendant "then and there" appropriated and embezzled the said sum of $10,235.33.

It is held in the opinion of Mr. Justice Blease, that, notwithstanding the specific and detailed allegation in the indictment of the facts claimed by the State to have constituted the offense of embezzlement, it is permissible for this Court to disregard such specification as surplusage, and to allow the State to stand upon a general undefined charge of embezzlement. I think that there are two perfectly sound reasons why this declaration cannot be sustained: In the first place that which is alleged in what is termed the videlicet of the indictment is intended to explain in what manner the embezzlement charged was committed; it is a material part of the indictment and cannot be disregarded any more than the videlicet to an indictment for forgery or perjury, for instance. If an indictment for forgery should contain a general charge of forgery and be followed by videlicet which showed that the transaction could not possibly have been a forgery, the videlicet cannot be disregarded, and practically annuls the charge. So with perjury and other crimes. Even in a civil action for damages resulting from negligence, a general charge of negligence followed by a specific charge is limited to the specific charge.

"If the statement laid under a videlicet is material, and enters into the substance of the description of the offense, and is impossible or inconsistent with the premises, neither clause can be rejected as surplusage, and the indictment is void." Maloney v. People, 229 Ill., 593; 82 N.E., 389.

"An indictment which charges an offense in the general terms of the statute, followed by detailed statement of the facts constituting such offense, from which it affirmatively appears that no violation has necessarily been committed, is defective." State v. Newman, 29 N.M., 106; 219 P., 794

"The cases to which our attention has been directed, as an examination of them will demonstrate, in which the purporting clause is held mere surplusage, have reference to a simple variance with the tenor of the instrument. But, on the other hand, there is no case which goes to the extent of saying that even an unnecessary allegation that is repugnant and inconsistent with the main charge to the extent of charging that no offense has been committed will be treated as surplusage. This is a broad admission of record," which "the State cannot at pleasure deny." State v. Leonard,171 Mo., 622; 71 S.W. 1017; 94 Am. St. Rep., 798.

"Where an indictment sufficiently charges the defendant with the crime, it is not impaired by the subsequent statement therein of the facts or circumstances under which it was committed, unless such statement of itself constitutesa negation of the crime." People v. Evanoff, 45 Cal.App. 108; 187 P., 54.

In the second place, even if the videlicet contains unnecessary details, it cannot be regarded as surplusage.

In 19 Cyc., 424, it is said:

"If the pretense is described more minutely than is necessary, such description is a part of the indictment and cannot be treated as surplusage."

"It may be that the pretense was described more minutely in the indictment than was essential. However, only one pretense is alleged, and the words of particularity in respect to it are a part of the indictment, and cannot be regarded as surplusage." Cook v. State, 162 Ala., 90; 50 So., 319, citing 19 Cyc., 423. Cowan's Case, 41 Tex.Crim. R.;56 S.W. 751. O'Connor's Case, 30 Ala., 9; Beasley'sCase, 59 Ala., 20; Mecks' Case, 117 Ala., 116; 23 So., 155.

"While it may be unnecessary to set out with particularity descriptive averments, yet when this has been done they cannot be ignored. They form part of the indictment, and cannot be treated as surplusage." Cowan's Case,41 Tex.Crim. 617; 56 S.W. 751.

"If the pretense is described more minutely than is necessary, such description is part of the indictment and cannot be treated as surplusage." 25 C.J., 624.

See, also, State v. Paulson, 27 S.D., 24; 129 N.W., 558.

The testimony offered by the State was directed specifically to the establishment of, not the fact of a general undefined defalcation, but to the charge of embezzlement as defined and detailed in the indictment. It thus appeared that on September 1, 1915, the county borrowed $10,000 from the Enterprise Bank of Walhalla and a note therefore was given, payable January 1, 1916, for $10,235.33, the $235.33 representing the interest or discount. On January 8, 1916, the defendant, as County Treasurer, paid off the note, with $14.95 interest from January 1st to 7th, and obtained from the county supervisor a county warrant for $10,250.28 to reimburse himself by way of credit upon his account as county treasurer. Six years later, in 1922, the grand jury engaged W.K. Boleman to audit the books of the treasurer. He reported, contrary to the established and admitted fact, that the defendant had never received credit for the $10,235.33 paid by him to the bank on January 8, 1916, and recommended that a county warrant be issued to the defendant for that amount, that he might obtain the credit to which he was supposed to be entitled. Some two years later, on September 30, 1924, acting upon the suggestion of Boleman, the defendant presented a claim against the county for the amount, specifically stated to have been for reimbursement, and obtained from the supervisor a county warrant therefore, payable out of the ordinary funds of 1924. Later the books were again audited, this time by Wilkinson, a certified public accountant. He testified, what appears to be undisputed, that the defendant in January, 1916, received credit for the county warrant for $10,250.28 upon his books, and also in the annual settlement of June 30, 1916; that he also received credit for the warrant for $10,235.33 upon his books, and also in the annual settlement of July 1, 1925, showing unmistakably that the defendant had received a double credit for the same thing. The accountant expressed his legal conclusion as follows: That by receiving credit for the last check or warrant the money belonging to Oconee County held by Mr. Alexander was decreased in the sum of $10,235.33; that the county paid the Enterprise Bank note twice; that the last time it paid it the county lost the sum of $10,235.33; and that R.H. Alexander benefited by that. He also testified that he found the defendant short in his accounts as treasurer for the fiscal year 1924-1925, $67,536.99, after deducting from the credits claimed by the defendant the duplicate warrant of $10,235.33. I assume that the shortage was an accumulation during his entire occupation of the office.

The accounting made by Wilkinson is entitled to, and has received, my very great respect; but his legal conclusions, as the record shows, developed by the leading examination of counsel for the State, are so obviously misconceived as to be entitled to no consideration. The defendant, of course, was entitled to only one credit for the amount paid by him to the bank. The effect of receiving credit for the duplicate warrant could not have been to decrease "the money belonging to Oconee County held by Mr. Alexander," unless it be shown that at that time Alexander had that much cash on hand, of which there was no evidence. and which is a most improbable conception, in view of the fact that, excluding this item of credit claimed by him, he was short $67,000.00. It was nothing more than the entry of a false credit item in his account which was detected and eliminated. His conclusion is equally at fault that "the county paid the Enterprise Bank note twice." As a matter of plain fact it only paid it once and Alexander was prevented from receiving any benefit from the duplicate warrant by the discovery that he had already received credit for his payment. So with his conclusion, "that the last time it paid it the county lost the sum of $10,235.33." This is impossible, as the transaction amounted to no more than an incident of bookkeeping which was corrected and eliminated. The county did not lose a dollar by the transaction, and, if so, the statement that Alexander benefited by it is equally untenable, for, if the county lost nothing, Alexander could have gained nothing.

While it may be true that the defendant destroyed or concealed the original warrant for which he had been allowed credit, induced Boleman to recommend the issuance of what developed to be a duplicate warrant, procured such duplicate and made use of it as a credit item against a large deficiency in his accounts, highly reprehensible and fraudulent conduct, knowing that he had already been allowed credit for the payment of the note to the bank, by means of the original warrant, he did not thereby obtain a single dollarof the money belonging to Oconee County, and cannot therefore be convicted by that transaction, upon which the indictment is based, of appropriating to his own use or benefit a single dollar. The true situation, as I view it, is that he was short in his accounts, due to the appropriation of the county's money in the years preceding the Boleman audit, whether with a criminal intent or not, it is not for me to say, and was quick to seize upon the recommendation of Boleman, as a means of partially covering up the misappropriationthat had already been committed. If so he got nothing of the county's money and expected to get nothing. It is probable that, if the defendant had been indicted for the fraudulent embezzlement of the $67,000 found by Wilkinson to be due to the county, his conduct in connection with the duplicate warrant may have been petitioned evidence, particularly if Boleman's recommendation had been suggested by Alexander, and the original warrant purposely destroyed or concealed. He is not, however, charged in this indictment with the embezzlement of this sum or any part of it; he is charged with the embezzlement of this particular warrant, a species of property, not money, by which the county is said to have lost $10,000, whereas, it has been conclusively shown that the county did not lose a dollar.

The injustice to the defendant of a conviction of embezzlement under the allegations of the indictment and the proof in this case appears to me manifest. The proper course to have pursued is to have indicted him for fraudulent embezzlement of the $67,000. Upon a trial of such a charge the State would have been compelled to show not only an appropriation, but a fraudulent appropriation. What the defendant's defense to such a charge cannot be known. It certainly cannot be assumed that he had none, however probable that fact may be. The issue in the case as tried was with reference to his alleged fraudulent conduct in connection with the duplicate warrant; a transaction which could not possibly be contorted into embezzlement, or the loss to the county of a single dollar.

I have not been able to find a statute in this State which makes it a specific criminal offense for an officer, state, or county intrusted with the disbursement of public funds to procure a credit voucher upon a false claim. That is what the defendant is shown to have done, accepting the state's evidence as true. It is a statutory offense under the act of Congress in relation to federal officers. Rev. Stat. § 5438. Barnes' Code, § 10366 (Comp. St., § 10199). Would it be contended that the violation of the federal statute constituted, also, the offense of embezzlement? I hardly think so. Unquestionably the alleged conduct of the defendant would come within the provisions of Section 472 of the Criminal Code:

"Any public officer * * * who shall be guilty of anyofficial misconduct, habitual negligence, habitual drunkenness,corruption, fraud, or oppression, shall be liable to indictment," etc.

If the defendant has violated any law in connection withthe duplicate warrant, he has violated this statute, and not the statute under which he was indicted (Section 459, the embezzlement statute), for the simple reason that by that transaction he has not received a dollar, has not appropriated a dollar to his own use or benefit, and the county has not lost a dollar.

It developed upon the argument of the case that there are two other indictments pending against the defendant upon transactions quite similar to that in question. Shall he be convicted upon these as well, indicted for embezzling $67,000 separately, and also indicted for violation of Section 472? If he shall be considered guilty of embezzlement in connection with the original warrant for $10,000, a like fate awaits him as to the other two duplicate warrants, and the conviction upon all three will not militate against his indictment for misappropriation of the $67,000, or of his violation of Section 472. All of which demonstrates that the prosecutions concluded and pending were instituted under a misconception of the law. I have no sympathy for the breach of a public or a private trust, but I do not think that righteous indignation should lead this Court into the perpetration of a judicial wrong.

In Commonwealth v. Este, 140 Mass. 279; 2 N.E., 769, it is held that where the defendant failed to charge himself with the proceeds of certain notes for borrowed money for the town of which he was treasurer and credited himself with certain payments made, presumably from such proceeds, "the fact that the payment was a means of embezzling other money in the future, or covered up an embezzlementof other money in the past, would not make it an embezzlement of the money paid. * * * Further, it is at least as likely that the way in which the defendant, in fact,made himself better off by crediting or by failing to charge himself, whatever his intent, was by conceding an old deficiency,which, of course, would not be embezzlement, although the instruction would have created a certain impression in the jury's mind." (The added italics are particularly apposite to the present case.)

An interesting case, illustrating the distinction which I have endeavored to present, is that of State v. Baumhager,28 Minn., 226; 9 N.W., 704. There the defendant, succeeding his predecessor as county treasurer, found in the office an order upon the treasurer which he knew that his predecessor had redeemed, but had neglected to stamp "paid." The defendant falsely marked it as redeemed and paid by himself and falsely credited himself on his books with the amount of the order as having been disbursed by himself. Subsequently in a settlement with the auditor he presented the paid order and fraudulently obtained credit therefor. The amount of this order was $53.25 and at the time of the settlement with the auditor the defendant had cash on hand to the amount of $5,000. Upon indictment for embezzlement of the $53.25, converting it to his own use, the Court concluded that the evidence was sufficient to carry the case to the jury. The Court said:

"Now, the state of facts made to appear was that presumably defendant came into possession of this order as successor to Ring, finding it in the office when he took possession. Knowing that Ring had redeemed and paid it, but had neglected to mark it redeemed, he must also have known that he had no right to any credit for it, not having paid it. He subsequently falsely marks it paid and redeemed by himself, and falsely credits himself on the official books in his office with the amount of the order as paid out by himself. He then returns it to the county auditor as redeemed by himself, for the purpose of obtaining credit for it, and in fact obtains credit for it on the auditor's books, thus reducing the amount for which he was chargeable or indebted to the county. This is done at a time when he has in his hands a large amount of public funds for which, in law, he stands debtor to the county. In the absence of any explanation, there can have been reasonably but one purpose for such conduct, viz.: to obtain a false credit, so as to enable him to appropriate an equal amount of the public funds to his own use. And in the absence of any such explanation or rebutting evidence tending to show that he had not in fact made such appropriation, we think it would fully warrant the inference that this intent was carried out."

The marked distinction between that case and the case at bar is that there the defendant had 100 times as much money on hand as the order amounted to, while here the defendant had $67,000 less than nothing. There it could reasonably have been inferred that after his settlement with the auditor, or possibly before, the defendant abstracted the amount of the order. Here that was a physical impossibility. The gist of embezzlement is an actual conversion of the county's money by means of a false voucher. If the voucher had been obtained for the purpose of covering up a past deficiency, taking credit for it upon his books and thus reducing pro tanto the amount of his debit balance, it is impossible that the transaction could have resulted in the conversion of a dollar.

In Dickey v. State, 65 Tex.Crim. R.;144 S.W., 271, the defendant, city treasurer, was charged with embezzlement in taking a check for $314.25 which should have been credited to a certain fund and depositing it to the credit of another city fund for the purpose of covering up a prior defalcation in the latter fund. The Court held that the facts did constitute the offense charged, as the fact that the transaction was for the purpose of covering up a past defalcation clearly demonstrated that no money had passed and that there had been no conversion.

The conviction is sought to be sustained upon the theory that the defendant fraudulently obtained the warrant and appropriated it to his own use; that he received the benefit of it as a credit upon his books and in his settlement with the auditor and comptroller general. There are two objections to this theory: In the first place the defendant is charged and has been convicted of embezzling money, notproperty, as the warrant was; and in the second place the statute does not embrace embezzlement of property.

Another consideration which I think is an insuperable bar to the conviction is that the crime of embezzlement is based upon the lawful possession by the officer of the funds embezzled, and his subsequent felonious conversion of them to his own use. If the fraudulent purpose was conceived before his possession began and was obtained by false representations with the intent to appropriate the funds to his own use, he was guilty of larceny and not embezzlement; the distinction between the two offenses being the initial lawfulness or unlawfulness of the possession.

In State v. Kennedy (Mo.App.), 239 S.W. 869, it is held:

"In order for defendant to have been guilty of the crime of embezzlement it was necessary that he either have actual or constructive possession of the goods, and that his intention to steal them was conceived only after he came into lawful possession of the same. If felonious intent existed at the time of the taking, then he was guilty of larceny" — citing cases.

The indictment alleges and the State stoutly maintains that the defendant had already received credit for the payment to the bank; that he knew that he had done so; that he fraudulently procured the duplicate warrant. If so, clearly he did not come into possession of the duplicate warrant lawfully, and, if not, and the transaction was a fraud from the beginning, he cannot be held guilty of the crime of embezzlement, whatever other crime may have been committed.

I think, therefore, that the judgment of conviction under the present indictment should be set aside and that the case should be remanded to the Circuit Court, with instructions to direct a verdict of not guilty upon the first count of the indictment; the defendant having been already acquitted upon the second count. The effect of this acquittal upon the State's right to proceed upon the charge of embezzling county funds, as indicated in the Wilkinson audit, is not at this time properly before the Court, and has not been considered.