11 Ga. App. 427 | Ga. Ct. App. | 1912
1. Mangliam was convicted of tbe offense of embezzlement, as defined by § 186 of the'Penal Code of 1910. His motion for a new trial being overruled, the case is here for review. The record is exceedingly voluminous.. It contains a demurrer to the indictment, based on numerous grounds; and the motion for a new trial, besides the general grounds, contains thirty-five special grounds. The grounds of the demurrer are substantially repeated in the motion for a new trial, and the grounds which we deem of sufficient importance to require special elaboration will be treated
The Boyd-Mangham Manufacturing Company was a corporation, created under the laws of Georgia, for the purpose of manufacturing and selling cotton goods, having its principal place of business and location in Spalding county. Its' capital stock was $150,000. J. J. Mangham was officially the treasurer of the company, and, in addition to his duties as treasurer, during all the time in which the corporation was carried on, the entire management of its affairs was entrusted to him by the stockholders and the board of directors. The mills manufactured annually 2,500 bales of cotton, the output amounting to about $200,000 a year. Mangham bought all the cotton, whether “spot” or for future delivery, and sold .all the manufactured goods, principally through A. D. Smith & Company of New York City, collected for the sale of these goods, borrowed money whenever he deemed it necessary on the notes of the corporation, furnished to the bookkeepers and clerks under him the data to be entered on the books, and furnished annually to the stockholders and the board of directors a financial statement, made up under his personal and direct supervision. The board of directors gave very little attention to the management of the affairs of the corporation, but seemed to be contented with an annual declaration of dividends, based upon the statement furnished to it by Mangham, the treasurer. During this period Mangham’s management of the mills was apparently successful and-profitable to the stockholders, they having received in dividends nearly $200,000. In 1911 the corporation was declared insolvent, and bankruptcy proceedings were instituted against it. An examination of its books by expert accountants developed many and serious irregularities and numerous false entries, evidently designed to conceal its true financial condition. It would be profitless and a useless consumption of space to note all of these false entries and irregularities, and it is impossible to say whether they were made for the purpose of concealing the true condition of the company from the directors and stockholders and creditors, or for the purpose of enabling the defendant, as treasurer and as the ex-
It is interesting to note some of the more prominent false entries shown by the books, according to the testimony of the experts. In 1911 the difference in round numbers in the condition of the Boyd-Mangham Manufacturing Company as shown by its books, and its true condition-as shown by the.audit, was $200,000. The books showed $200,000 more assets than the company really had, and that the company had $150,000 of unimpaired capital and $80,000 of surplus. The audit showed that it actually had no surplus, and that its capital stock was greatly impaired, if not entirely eliminated. The amount carried on the books as cash, by .statement made April 30, 1910, was $27,954.11, while the actual cash was only $7,388.40. On September 18 and 19, 1908, the book entries showed cash amounting'to $33,457.72, while the actual cash was only $1,717.44. On February 4, 1911, the actual cash on hand was $43.15, and the boob entries representing cash showed $44,757.95. The expert accountant who made the examination and audit of the books in 1911 testified that although these book entries contained a cash item of $40,000, there was in fact no cash on hand. He also testified that while the ledger and the financial statement made by the treasurer on May 8, 1910, showed a surplus of $97,295.69, there was in fact at that time a deficit of $111,-372.34, or over $200,000 difference between the amount shown by the ledger and the statement and the amount discovered by the examination. .
The difference between the apparent situation shown by the entries on the books and the real situation shown by expert examination is comprehensively summed up in a full statement made by one of the experts. (1) The real estate and the machinery were carried on the books at a much greater valuation'than they were really worth. (2) The mill supplies represented to be on hand were a great deal more than were actually on hand. (3) The statements' showing money, assets, and interest were incorrect. (4) The value of coal on hand was stated to be $5,451, when in
Coming down to the specific charges of embezzlement against Mangham. The indictment alleges that as treasurer, at divers times, continuously during the years of 1905, 1906, 1901, 1908, 1909, and 1910, he embezzled of the funds of the company the sum of $23,412.50; and it further alleges, that during these years he made fraudulent entries on the books of the corporation for the purpose. of concealing from the corporation the embezzlement of this amount of money; that he converted this amount of money to his private use by illegal speculation, and by otherwise disposing of it, not for the benefit of the corporation. The evidence in support of these allegations as to the false entries has already been partially discussed. As to the allegation that he fraudulently appropriated the sum specified to his own personal use, several specific instances are shown, a few of which we will note. The president of -the Fulton National Bank, located in the city of
There are other specific instances given in the evidence, which, it is claimed by the State, tend to prove the allegation of embezzlement, made in the indictment. Without going specifically into this evidence of alleged technical embezzlement at least, it may be stated generally that Mangham apparently treated the funds of the corporation as his own. To use the language of the bookkeeper: “He continually put in money and drew it out.” In this connection he says again: “The situation was that J. J. Mangham would put in a certain amount of money, and possibly the same
The accused did not deny this method of dealing with the trust fund's nor the discounting of the notes of the corporation, and the deposit of the proceeds thereof to his credit.' He claimed that he was entitled to do so because the corporation owed him more than the amount of these notes at the time the discounts were made, and that he was fully authorized, by his position in the corporation and by his uniform transaction of its business in this manner, to reimburse himself for the use of his individual funds by the corporation. As to these matters it may be remarked here that the learned trial judge charged the jury in substance as follows: that if the evidence showed that the accused was an executive officer of the corporation, having in charge the business and the investing of the funds of the corporation, and generally financed the business of the company, the deposit of the funds of the corporation to his own individual account in the bank would not constitute the offense of embezzlement, but the presumption would be that he was using the money of the corporation for the business of the corporation, and the State would have to go further and show that he did not use the money for the corporation, but that in taking such money he intended not to apply it to the business of the corporation. This statement as to the law is a statement most favorable to the accused, but we can not concur in the view of the trial judge that it is a correct statement of the law with reference to the crime of embezzlement. On the contrary, we think that an official of a corporation, whatever may be his duty in reference to the funds of the corporation, whether or not the entire matter of financing the affairs of the corporation was entrusted to him, would in no event
Right here it may be stated, in justice to the accused, that the evidence is very clear that he frequently indorsed notes for the purpose of raising money for the corporation, indeed that he went to the limit of his own personal credit for this purpose, and that there was rarely a time during his connection with the corporation (which amounted to the life of the corporation) that the corporation did not owe him and he did not owe the corporation; and when the corporation’s failure came, the evidence was in conflict as to which was the creditor or debtor, the corporation or the accused official. The jury were authorized to accept the statement of the expert accountant that at the time of this failure the accused
We confess that we are very greatly impressed with the clear, detailed statement which the accused made in his own defense. This statement was a very lucid explanation of the specific acts of alleged fraudulent conversion apparently proved against him; and we may state also that the record discloses that the management of this corporation by the accused had been for many years very successful, and that its eventual failure was not primarily due to his management or to his dishonesty, but to other causes, such as business conditions of the country which were beyond his control; and it is well-nigh incredible that a career of honesty and efficiency should have ended in the crime of embezzlement. It is difficult to find a motive for the commission of such a crime by a trusted official who had for years carried on the business of his trust, not only honestly, but most successfully, and whose financial success depended upon the continued successful existence of the corporation in his charge. The failure of this corporation meant his personal, individual failure; it meant his financial ruin; it meant the end of his business career; it meant individual bankruptcy for him and his brother, for the evidence discloses that they were indorsers on the paper of the corporation at the time of its failure, for a very large amount. All these questions, however, were for the decision of the jury, and this court can not say that the con
This court lays down the rule of law to be, under the statute defining embezzlement, that there can be no legal individual use, however temporary, of trust funds. The trusted official may not intend, at the time of such wrongful temporary use, a permanent misapplication of the funds entrusted to him; but if he uses for a short time, for his individual benefit, the funds of the corporation entrusted to Mm as an official and coming into his hands as an official, it is none the less the crime of embezzlement, even though he may have at-the time intended subsequently to make restitution. The fraudulent intent will be inferred' from a temporary individual use of the trust funds, and the act, prima facie at least, will be branded as embezzlement. Orr v. State, 6 Ga. App. 628 (65 S. E. 582); Jackson v. State, 76 Ga. 551. An officer or agent of a corporation can not take money of the corporation which is entrusted to him, or which comes into his possession by virtue of his office or agency, 'and use it even temporarily for his personal benefit, and avoid criminal responsibility by calling it a loan. The law calls such a transaction a wrongful- conversion, from-which a fraudulent intent can be inferred. It may be that Mangham as treasurer could lawfully loan his own money to the mills and subsequently repay these loans by taking the money of the mills and by discounting its notes, but the practice is not to be approved. It is of doubtful propriety and dangerous, and certainly placed upon him the burden of showing that the balance was at all times in his favor.
We conclude this discussion of the general grounds of the motion for a new trial by the statement that while, in our opinion, the evidence did not demand the verdict of guilty, yet there were circumstances from which the jury, in the exercise of their exclusive prerogative to weigh motive and conduct and to draw inferences from facts, were authorized to find a verdict of guilty.
2. We will now take up and consider, in so far as deemed material, the special assignments of error made in the amended motion for a new trial. It is insisted that the venue was not shown by the evidence; that as to the specific acts of the accused in discounting the notes of the corporation in the city of Atlanta and in
3. It is further insisted, that some of the acts alleged by the State to have been criminal occurred four years prior to the filing of the indictment, and were therefore barred by the statute of limitations, and that the testimony relating to these alleged criminal acts should have been excluded. The allegation in the indictment is that an aggregate sum was embezzled, but that this aggregate sum was made up of repeated and continuous acts in a series of embezzlements extending through a period of six years prior to the filing of the indictment. Conceding that some of the alleged criminal acts were barred by the statute of limitations, evidence relating to them was nevertheless admissible for the purpose of showing fraudulent intent as to those which were not barred. Jackson v. State, 76 Ga. 551. Our decision on this point covers many of the exceptions taken as to rulings on testimony and excerpts from the charge of the court. Again, in addition to what has been’ said on this subject, the indictment alleged that the offense as described therein was “unknown until on or about the first day of January, 1911," and this allegation was sufficient to make an issue, and evidence relating to this issue was submitted to the jury, and there was sufficient evidence to show that the offense was not known until 1911, when an audit of the books of the mills was made. Besides, this was a special presentment by the grand jury, and the allegation that the offense charged therein was unknown was sufficient to cast upon the defendant the burden of showing that it was not true. Cohen v. State, 2 Ga. App. 689 (59 S. E. 4). The evidence also shows that the accused had entire control and management of the mill during its entire existence; that he frequently loaned money to the mill and borrowed money
4. The following excerpt from the charge is assigned as error: “I charge you that the intention to fraudulently appropriate may be inferred from the facts and circumstances, that is, by direct or circumstantial evidence. It may be inferred from falsified accounts, from making false statements and attempting to conceal the true state of the financial condition of a corporation. And when these things are shown, it is sufficient to require the defendant to explain such facts and circumstances; and if not satisfactorily explained, a conviction will be authorized, if the fraudulent taking has been proved.” This extract from the charge is objected to on the ground that it was an expression of an opinion upon the facts, and was equivalent to telling the jury that an intent to steal in this ease could be inferred from falsified accounts, or from making false statements, or from attempting to conceal the true state or financial condition of the corporation, and this was entirely a question for the jury. The excerpt is not justly subject to this criticism. There was much evidence relating to irregularities in keeping the books. Many false entries were proved. Whether this juggling with the books was for the purpose of concealing the existence of embezzlement or improper use of the funds of the corporation by the accused, or was for the purpose of keeping the corporation a going concern and preventing its bankruptcy and failure, was one of the material issues to be decided by the jury. The jury could reasonably infer that an official who had had almost the exclusive control and management of the corporation during its existence, and who had proved that he was very efficient in the management of its affairs, should be able to give a clear account of every dollar of the corporation which had been expended in its behalf by him, or which had come into his hands as
5. Some exceptions are made to other excerpts from the charge. We have examined them carefully in connection with the entire charge and the evidence, and find that these exceptions are without merit. In'fact we do not hesitate to say that the instructions of the trial judge contain a full, fair, and accurate statement of all the issues made by the evidence. The truth of this statement is shown by the fact that many of the exceptions contained in the amended motion are based upon the allegation that the verdict was contrary to the charge on the various issues involved. The learned judge gave the accused the benefit of a favorable charge on every contention insisted upon by him. In many instances the criticism might be justly made that the instructions were much more favorable to'the accused than-he was entitled'to expect or to receive under the law. The record clearly demonstrates that the accused has had a fair trial; that no error of law was committed against him, but that on the contrary, if any errors were committed, they were in his favor.
An exhaustive and careful examination of the record fails to disclose any reason why another trial should be granted.
Judgment affirmed.