104 P. 596 | Or. | 1909
Lead Opinion
delivered the opinion of the court.
1. The statute (B. & C. Comp.) upon whiclathis prosecution is based provides: ____
“Sec. 1807. If any person shall receive any money whatever for this State * * or shall have in his possession any money whatever belonging to such State * * and shall in any way convert to his own use any portion thereof * * such person shall be deemed guilty of larceny. * * ”
The first question for consideration relates to the character of the deposits made by the State Treasurer with the Trust Company, whether they were general or special,
“Section 1. It shall be the duty of the State Treasurer, on the first Monday in June of each year, to designate such banks and trust companies within this State, as he may, under the provisions of this act, deem eligible to be made State depositories, for the purpose of receiving on deposit funds of this State, and paying out the same on order or checks of the State Treasurer.”
“Sec. 3. The State Treasurer shall deposit, and at all times keep on deposit in national banks doing business in the State of Oregon, or other banks and trust companies doing business within this State, as shall have been approved under the provisions of this act as herein provided, the amount of money in his hands belonging to the several funds in the State Treasury, and any such bank or trust company may file with the State Treasurer its application for the privilege of keeping on deposit such funds or some part thereof. All such deposits shall be subject to payment when demanded by the State Treasurer on his check, and any bank receiving- and holding any such deposit as aforesaid shall be required to pay and shall pay to the State for the privilege of holding the same, interest at the rate prescribed by the State Treasurer as hereinafter provided, which rate of interest shall not be less than two per cent per annum. * *
“Sec. 5. For the security of funds so deposited under the provisions of this act, the State Treasurer shall require all such depositories to deposit securities of the kind and character hereinafter described, or to give bonds for the payment of such deposits and the interest thereon. Said bonds, when given, shall run to the State of Oregon, and, together with the securities offered, are to be approved as to the legal form by the Attorney General. * * The bond provided for under this act shall be a surety company bond. * * [Here follows the form of bond to be given by a surety company.]”
“Sec. 9. The word ‘bonds/ wherever used in this act, shall be held to include bonds furnished by surety companies authorized and qualified to do business in this
“Sec. 16. The word ‘funds’ used in this act shall apply to all funds in the State Treasury except the common schools, agricultural college, and university funds. Nothing in this act shall be construed to deprive the State Land Board of the power to invest or dispose of the funds derived from the sale of public lands as is now or may be provided by law.”
Thus it will be seen that the educational funds are excepted from the provisions of sections 1 to 5, inclusive. But sections 6, 7, and 8 include the educational fund, and provide as follows:
“Sec. 6. The State Treasurer may designate a bank or trust company in the City of Salem or a bank or trust company in the City of Portland as an active depository for the collection of any drafts, checks, certificates of deposit and coupons that may be received by him on account of any claim due the State.
“Sec. 7. The bank or trust company, designated as such active depository, shall be required to give security to the State to be approved by the State Treasurer for the prompt collection of all drafts, checks, certificates of deposit, coupons that may be delivered to such active depository by the State Treasurer' for collection; also, for the safe-keeping and prompt payment on the State Treasurer’s order of all such collections, also for the payment of all drafts that may be issued to said State Treasurer by such active depository.
“Sec. 8. The State Treasurer, on receipt of any draft, check, or certificate of deposit, on account of State dues, may place the same in such active depository for collection, and it shall be the duty of such active depository to collect the same without delay, without charge for its services for such collection, or for exchange, and to notify the State Treasurer when collected. The compensation to be paid by such active depository shall be fixed by the State Treasurer upon the best terms obtainable for the State.”
Section 10 contains the following clause:
“The State Treasurer shall not be liable personally or upon his official bond for any moneys that may be lost
The purpose of this statute is to secure to the State interest on State funds, and to provide depositories for State moneys. Of this act sections 1 to 5, inclusive, relate to the creation of depositories and payment of interest on money deposited, and applies to all State funds other than educational funds, but has no application to them. Sections 6, 7, and 8 provide for active depositories, and apply equally to the general and educational funds. It is evidently not the purpose of these sections that the active depositories shall loan or be required to pay interest on funds deposited thereunder, as section 5 provides for the security that shall be taken from general depositories, and if the active depositories could loan funds deposited therein, under the provisions of sections 6, 7, and 8, the effect would be to nullify the requirements of section 5 as to the character of the security to be given for the general deposits. The writer is unable to understand the purpose of the last clause of section 8, unless it is to give to the State the. benefit of any deal that the Treasurer might be able to make for compensation. But whatever the intention, it cannot change the meaning of these sections.
Thus it appears that deposits, if they may be called such, in the active depositories, as provided in section 6, are made for an entirely different purpose than those provided for in section 3, and are only for a special purpose, namely, for the collection of the checks and drafts transmitted by the Treasurer, the safe-keeping and prompt payment of the money upon the Treasurer’s order. For the security of funds of the general depositories the State Treasurer may require securities, such as United States, State, or municipal bonds, described in section 9, or a bond executed by a surety company, for which a form is prescribed and conditions specified. But
Counsel for defendant cite Baker v. Williams’ Banking Co., 42 Or. 213 (70 Pac. 711), as decisive of the rights of the treasurer to make a general deposit of the educational fund, but the question involved here did not arise in that case, and could not, as we are now controlled by the statute of 1907. ' The character of deposits must be determined by this statute. Section 11 makes it a felony for the treasurer to remove or deposit the State money except for lawful payments “or for the purpose of depositing
2. Defendant further urges that the proof shows only a deposit and conversion of checks and drafts, and not money as charged in the' indictment, and that this is a variance. The bill of exception shows that the Treasurer sent by mail to the Trust Company for collection checks and drafts. When these were paid by the banks on which they were drawn, the Trust Company thereby received the money for the credit of the Treasurer, and it is immaterial how they were paid. There is no suggestion in the record that the Trust Company did not receive the money. On the contrary, upon the receipt of the check “No. 319, Geo. A. Steel, Treasurer, upon you, $272,449.02,” and check “No. 34, Geo. A. Steel, State Treasurer, on Ladd & Tilton, $2,600,” the Trust Company opened an account on its books, entitled “Geo. A. Steel, Treasurer, Educational,” and credited that account with a deposit of those amounts—$272,449.02. This is an acknowledgment that it received from itself and from Ladd & Tilton that amount of money for that account upon those checks. And the same is true of every other credit made, and constitutes at least prima facie proof of the receipt of the
“It is true that the bill of exceptions recites that there is no evidence as to what was done by the defendant with the checks and drafts; but, in the absence of a showing to the contrary, the jury were justified in finding that they were by the defendant converted into money on the presumption that the usual course of business was pursued. Section 788, subd. 26, B. & C. Comp.”
Morse, Banks and Banking, Section 451, says:
“A credit given for the amount of a check by the bank upon which it is drawn is equivalent to, and will be treated as, a payment of a check. It is the same as if the money had been paid over the counter on the check, and then immediately paid back again to the account.”
This language is quoted with approval in Bartley v. State, 53 Neb. 310, 338 (73 N. W. 744, 752) in a case where a similar question arose; and in Merchants’ Nat. Bank v. School Dist. No. 8, 94 Fed. 705 (36 C. C. A. 432), the fund was held to be a trust fund and a special deposit, the title to which remained in the school district, though the deposit was made by checks, ánd the money not paid over the counter or segregated at the time, but placed to the credit of the district on the books of the bank.
3. When the Trust Company placed to the credit of “Steel, Treasurer, Educational,” the amount of a check, it thereby acknowledged that it had received the amount of the check in money, and is at least prima facie sufficient to establish the receipt of the money by the Trust Company. Having decided that the money in the hands of the Trust Company was a special deposit, and the money remained the property of the State of Oregon, and was paid out to other persons than the State Treasurer, it follows that this was a conversion of the money.
“All the defendants were properly convicted. As officers of a company, they were jointly responsible for the business. It is not necessary to the conviction that they should be actually engaged in work upon the premises. The work is carried on by employees. The officers and directors are the persons responsible, and therefore the proper ones to be prosecuted.”
To the same effect is State v. Great Works Milling & Man. Co., 20 Me. 41 (37 Am. Dec. 38).
Defendant contends that section 1807, B. & C. Comp., is only intended to punish persons who are authorized by law. to receive money for the State, or into whose hands it comes lawfully, and who convert it, and that Ross was not individually authorized to receive the money. Under the act of 1907 the Trust Company was made an active depository, and therefore authorized to receive it. This it could only do by the hands of its officers; and, if it was a violation of the statute for the Trust Company to convert the money, it was equally so for any one who did the act for it, or authorized it. The money came into the hands of these defendants, as officers of the Trust Company, lawfully, by virtue of this statute, and they cannot be permitted to say that what they did in violation of the statute was not their act, and that therefore they are not responsible. If the acts were done in the name of the corporation by the defendants, then they were accessories, and aided and abetted, and
“It is the duty of the directors and other officers of a corporation to preserve its property as a trust fund of which they are the guardians, and to administer it for the purposes of the trust.”
And at section 4113 he says:
“In a moral sense they are the custodians of the funds committed to their care by the stockholders and the depositors.”
These two sections are only discussing their civil responsibility, but it indicates their relation to the funds, and we conclude that the directors and officers of the bank, who used or authorized the use of the money by the Trust Company, are guilty under this statute.
5. Counsel for defendant also urge that the evidence does not tend to establish a conversion of the money by defendant to his own use, namely, that it is not sufficient to show that the funds were converted for the benefit of the Trust Company, but must have been to the personal advantage of defendant. We do not so understand the law of conversion. The statute uses the expression “shall in any way convert to his own use any portion thereof.” That is what we understand the term “conversion” to mean, when applied to a wrongful appropriation for which trover will lie, namely, assuming upon one’s self the property and right to dispose of another’s goods without authority. The cases of Mills v. State, 53 Neb. 263, 271 (73 N. W. 761) and State v. Foust, 114 N. C. 842 (19 S. E. 275) cited by defendant as making a distinction between conversion to one’s own use and to the use of another, both intimate that the term quoted
We find no decision or text-book, nor is any cited by defendant, that attempts to define the meaning of the term “convert to his own use” when used in a criminal statute. Such conversion does not, in itself, constitute
“What is á conversion but an assuming upon one’s self the property and right of disposing of another’s goods, and he that takes upon himself to detain another man’s goods from him, without cause, takes upon himself the right of disposing of them.”
“An appropriation of, and dealing with, the property of another as if it were one’s own, without right.” Webster. Under the heading, “Appropriation to Convertor’s Use” (2 Words & Phrases, 1564) it is said: “Any direct act of dominion, wrongfully exercised over .one’s property in denial of his right or inconsistent with it, is a conversion”—citing many authorities. See 9 Bacon’s Abr. 631. To the same effect is the definition given by Mr. Justice Lord in the opinion in Budd v. Multnomah St. Ry. Co., 12 Or. 271 (7 Pac. 99: 53 Am. Rep. 355). Fowler v. Hollins, 41 L. J. (1872) 277, is a leading English case on this subject, and the court, in the opinion, uses the word “convert” as the equivalent of “convert to his own use.” See, also, a leading article in 13 Cent. Law J. 185, copied from Solicitor’s Journal, London. West Jersey R. R. Co. v. Trenton Car Works Co., 32 N. J. Law, 517. The term “convert to his own use” is not descriptive of crime, but is used in criminal statutes as a legal term with a definite meaning, well understood, and is equivalent to the legal term “conversion,” and this is the “conversion to his own use” of our criminal statute, which declares that such a conversion of state money,
We have six criminal statutes that make conversion of personal property of another “to one’s own use” a crime; and, if it be necessary for the State to prove that the conversion is for the personal advantage of the defendant, there would be a failure of justice in many cases. Every assuming by one person to dispose of the goods of another, without right, as if they were his own is a conversion to. one’s own use. This is not extending the statute by inference or construction, but giving to the words the technical meaning they bear in the law. Laverty v. Snethen, 68 N. Y. 522 (23 Am. Rep. 184), makes the distinction between conversion to the use of the owner and to one’s own use, and says:
“Trover may be maintained when the agent has wrongfully converted the property of his principal to his own use, and the fact of conversion may be made out by showing either a demand and refusal, or that the agent has, without necessity, sold or otherwise disposed of the property contrary to his instructions. * * If the agent parts with the property in a way or for a purpose not authorized, he is liable for a conversion.”
We understand from these authorities, and many others we have examined, that, in relation .to trover, the term “conversion” necessarily means conversion to one’s own use, and is fully accomplished by any exercise of a dominion over a chattel without the authority of the owner, whereby the true owner is deprived of the enjoyment of his chattel. And it is wholly immaterial whether the person so converting did it for his own personal advantage or not. See, also, State v. Omaha Nat. Bank, 59 Neb. 483 (81 N. W. 319).
6. One other question remains. Does the evidence tend to show that Ross, as a director or president, participated in, or was a party to, the conversion? “Officers, directors, and agents of a corporation, participating in a viola
This disposes of the principal questions involved. There are some minor questions raised, namely:
7. Exception was taken to the admission of evidence relating to Ross’ knowledge of the bill pending before the legislature of 1907, which authorized the appointment of depositories. This evidence only tended to establish Ross’ knowledge of the statute and its terms, and was not prejudicial.
8. Exception was taken to the admission in evidence of the demand made upon the Trust Company. This we think was competent and consistent with the charge in the information that defendants had the money in their control as officers and directors of the Trust Company, and a demand upon the Trust Company for which the defendants were acting was sufficient.
9. However, a demand, in case of conversion, is only
10. The proof offered by defendant to show absence of criminal intent was immaterial, as it only tended to show that, after the money was converted, the Trust Company gave the Treasurer collateral security. Such security is contemplated in the act of 1907, and when given did not condone the wrongful act.
11. The proof of loss through failure of the Oregon Trust & Savings Bank was incompetent, as the money— being a special deposit—should not have been involved in the dealings between the Trust Company and its creditors.
12. Neither is criminal intent involved under this statute, as we have shown in defining a conversion. Such a conversion, when committed in violation of the terms of this statute (Section 1807), constitutes the offense, and no other intent need be shown.
13. Exception was also taken to remarks made by the district attorney and the judge, in presence of the jury, in permitting leading questions by the State to its own witness. • When the district attorney was cautioned by the court not to cross-examine his own witness, he appealed to the court as follows: “I must invoke the rule in this case that, the witness is an unwilling one”— to which the court replied, “I see that the witness is unwilling.” Certainly the district attorney had a right to make such an appeal to the court if the conduct of the witness justified it, and any form of ruling by the court allowing the attorney’s question would have meant the same to the jury, as the language used, and was not error.
14. Exception is also taken to the portion of the judgment that commits defendant to the county jail until
15. There can be no question that a sentence may be excessive, even though within the maximum of the statute, but if excessive, it is within the power of the appellate court to enforce this provision of the Bill of Rights, and avoid the judgment so far as it is excessive. Mims v. State, 26 Minn. 494 (5 N. W. 369) ; Southern Express Co. v. Walker, 92 Va. 59 (22 S. E. 809: 41 L. R. A. 436) ; Frese v. State, 23 Fla. 267 (2 South. 1) ; State v. Butman, 15 La. An. 166. And the judgment and sentence of the lower court will be modified by reversing that part directing that “he be imprisoned in the county jail of Multnomah County, Oregon, until said fine is paid, not exceeding 288,426 days.” In all other respects the judgment is affirmed. Modified: Affirmed..
Rehearing
On Motion for Rehearing.
delivered the opinion of the court.
16. A petition for rehearing has been filed in this case by counsel for defendant, another by Carey & Kerr, on
Counsel for defendant and Carey & Kerr insist that the act of 1907 (Laws 1907, p. 248), has no application to the educational fund, and that the Treasurer has the right to make general deposits of that fund in any bank, as held in Baker v. Williams, 42 Or. 223 (70 Pac. 711), independent of that act, while it is contended in the petition of Joseph Simon et al., that by sections 6, 7, and 8 of the late law a general deposit of that fund in the active depository is authorized. We have re-examined the questions involved with the aid of the briefs submitted with these applications, and adhere to our first views. Sections 1 to 5 make provision for deposits, clearly contemplating that the deposits shall be general, and requiring the Treasurer to deposit all State funds, except the educational fund, in the general depositories. The collections made by the active depository upon checks and drafts for the general funds cannot be left there by the Treasurer, but must be transferred to the general depositories. This obligation is as binding on him as that he shall not retain the money in his office. Instead of exempting the educational funds' from the terms of the act, section 16 provides that the term “funds,” as used in the act, shall not include the educational funds, and that nothing in the act shall be construed to deprive the State Land Board of power over this fund, thus indicating that it is to be governed by the provisions of the act, save where it is excepted therefrom, and sections 6, 7, and 8 seem to have special reference to the educa
17. Section 1805, B. & C. Comp., defining embezzlement relates to the fraudulent conversion by an officer, agent, or clerk of a private person or incorporation, and does not apply to one in possession of public money, and Section 1807 relates especially to public moneys that are misappropriated. This is not a case where some other officer converted the money and defendant is held responsible for that act by reason of his relation to the bank. There is nothing in the record to disclose that any other officer wrongfully converted the money. The cashier or teller who paid out the money was not offender, unless he was aware of the source from which the money came and the capacity in which it was held. The wrongful act was done by the officers and directors who made the
“But, as said in Foster v. Essex Bank, supra (17 Mass. 479 [9 Am. Dec. 168]), it would be a breach of trust for the bank or any of its officers to open a package left on special deposit, and whoever did or counseled such act would be responsible to the owner for such tort. And, if done by an officer of the bank for its use and benefit, there can be no doubt the bank would be responsible. * * The books all show that such officers and servants are liable to the owner of such special deposits for their own wilful ácts.”
Such acts, resulting in the diversion of the money, constitute the conversion.
18. Defendant now, for the first time, questions the sufficiency of the indictment, in that it does not allege that the trust company was an active depository or that it sustained any official relation to the State. The allegation is in effect that the defendants, acting for the trust company, did then and there have in their possession $288,426.87 which belonged to the State of Oregon, and was part of the educational funds of the State, deposited for the State for safe-keeping, to be returned by defend
19. Defendant’s counsel contend that the charge against defendant was made by information filed March 6, 1908, and not by indictment, and that by the amendment of Section 18, Article VII, Constitution of Oregon, at the June, 1908, election, it is provided that no person shall be charged in any circuit court with the commission of any crime except upon indictment found by a grand jury; that such amendment operated to repeal Sections 1258 to 1264 which provide for trial upon information by the district attorney, and; there being no saving clause in-the amendment to the constitution, the appellate court is by the amendment divested of jurisdiction. This question was before this court in State v. Ju Nun, 53 Or. 1, (98 Pac. 513) in which it is held that the constitutional
20. Counsel again call our attention to the excessiveness of the fine, viz., $576,853.74, and upon further consideration we believe that the fine is excessive within thé contemplation of the constitutional provision quoted in the opinion. The fine and the imprisonment for nonpayment thereof, adjudicated by the trial court, were within the terms of the statute and in compliance with its direct command, but we are of the opinion that, the fine being so great, it is apparently beyond the power of the defendant to pay it at this time or even during a lifetime of effort, and is such a one as is inhibited by the constitution.
The judgment of the lower court will be modified by reversing that part thereof adjudging that defendant pay a fine of $576,853.74, and that he be imprisoned in the county jail of Multnomah County, Oregon, until said fine is paid, not exceeding 288,426 days. In all other respects the judgment is affirmed.
Modified on Rehearing: Affirmed.
Dissenting Opinion
delivered the following dissenting opinion. ■
I concur in the holding by the majority, respecting the unconstitutionality of the fine and jail sentence imposed; but, after a careful re-examination of the able briefs, and argument therein, of the respective counsel, including those on petition for rehearing, I am unable