People v. Borchers

The defendant, William C. Borchers, was indicted by the grand jury of the county of Los Angeles in ten counts—five for the crimes of larceny and five for embezzlement. As to the five larceny counts and one of the counts of embezzlement the prosecution was abandoned, but defendant was found guilty of embezzlement on each of the four remaining counts—numbered one, three, five, and nine. A motion for a new trial was interposed and denied, whereupon judgment of conviction was pronounced on each of the said four counts. The district court of appeal reversed the judgment and order so far as they related to counts one, five, and nine, but affirmed them so far as they concerned count three. We are in accord with the reasoning and conclusions of the district court of appeal touching counts one, five, and nine, and though we agree with the conclusion of that court as to count three, we cannot accept the reasons advanced therefor. As regards counts one, five, and nine, therefore, the opinion of the district court of appeal contains an expression of our views of the questions considered therein, and that portion of said opinion to which we now adhere, hereby adopt and make a part hereof is as follows:

“It is contended that the evidence was insufficient to sustain the verdict on the first count. This count charged appellant with the embezzlement of a check or order for $2000, drawn by one Sarah M. Garrigus in favor of Borchers, Clarke & Co., the indictment alleging that appellant at the time was the agent and bailee of Mrs. Garrigus. The evidence in support of this branch of the indictment, found in the testimony of the complaining witness, was to the effect

that Mrs. Garrigus was desirous of obtaining a loan for [of] $250,000; that appellant told her that he was connected with the Southern California Mortgage Company, which would let her have the money, but he later told her that one of the directors of the company objected to the making of the loan and stood in the way of the completion of the deal; that appellant then urged the complaining witness to buy the stock of this director in the mortgage company in order to be rid of him and therefore rid of his objection to the loan, saying that $2000 would be necessary for the purpose. Appellant urged this course upon Mrs. Garrigus on three different occasions and she finally consented to the plan, especially as appellant said to her that he would later sell the stock and give back her money. She then handed appellant her check on a bank for $2000, payable to Borchers, Clarke & Co., Inc. This paper was offered in evidence at the trial, together with an indorsement thereon, ‘Pay to the order of [another bank than the one on which the check was drawn].’ Below this indorsement appeared the signature ‘Borchers, Clarke & Co., Inc.’ The check also showed by means of a perforation stamp, ‘Paid 9-20-23,’ which date was the next day after the date of the paper. At the time of the delivery of the check to appellant Mrs. Garrigus signed a document headed ‘200 Units Subscription to Underwriters Syndicate,’ and which she testified she read before executing. This instrument recited in part that the signer subscribed for ten units of the common capital stock of ‘the Pre-organization Syndicate now being organized to underwrite’ shares of the common stock of the Southern California Mortgage Company, a corporation proposed later to be incorporated under the laws of Delaware; that the signer was to pay $2000 for the ten units upon signing the document; that the signer’s subscription and similar subscriptions ‘ shall be used for pre-organization purposes, and the expense of starting the company, and advertising campaign, and for selling expense of said stock to be issued under the direction of the underwriters, Borchers, Clarke & Company’; that each of the units subscribed for should be exchangeable for common stock ‘to be issued out of that promotion stock later to be issued to Borchers, Clarke & Company, underwriters for service performed and to be performed in organizing and procuring capital for said company’; that the ‘certificates of stock hereby subscribed for to be issued in my

name or to my order . . . and to be delivered to me when authorized by the Commissioner of Corporations and in full compliance with all the terms and conditions of the permit later to be issued by the Commissioner’; that the subscription was ‘taken and executed’ upon the condition that the company was to be organized within ninety days ‘or moneys collected to be refunded to the subscriber’; and that this ‘subscription unit transferable only upon acceptance and approval of Borchers, Clarke & Company.’ To this agreement was appended the following, signed ‘Borchers, Clarke & Company, By Wm. C. Borchers’: ‘Receipt of the sum of $2000.00 is hereby acknowledged and the above Pre-organization subscription is hereby accepted, in connection with the terms and conditions above mentioned.’ Mrs. Garrigus testified that she received no stock in exchange for the check, and that neither the check nor the $2000 which it represented was ever returned to her. The only evidence of an appropriation of the cheek for $2000, or of the amount represented thereby, was in the endorsement shown upon the paper, that is to say, the special indorsement signed ‘Borchers, Clarke & Co., Inc.,’ and the perforated indorsement, ‘Paid,’ with a date.

[1] “ For the purpose of testing the sufficiency of this evidence to support a conviction on the first count it is necessary to state several principles of the law of embezzlement. In order to sustain a conviction upon such a charge it must at least be shown, first, that the accused was the agent or bailee of the prosecuting witness in holding the alleged embezzled property; second, the property must actually belong to the alleged principal, the prosecuting witness; third, it must be lawfully in the possession of the accused at the time of the alleged embezzlement; fourth, the accused must have been guilty of the conversion which the statute denounces; and fifth, there must be shown an intent on the part of the accused to deprive the prosecuting witness of his property unlawfully. (See 20 C. J. 413 and following pages.)

“Before attempting to make application of these rules of law it is to be observed that in one respect the evidence under the first count of the indictment is to be viewed in two distinct aspects. Mrs. Garrigus testified that her cheek was given for the purchase of the stock in the mortgage

[2] “It appears to us that the evidence for the prosecution under the first count failed to establish several elements necessary to a conviction of appellant of the crime with which he stands charged. Various considerations seem to exhibit the justice of this remark. The cheek, under any view of the evidence, was delivered into the hands of appellant with the intention upon the part of Mrs. Garrigus that it should be cashed and that its proceeds should be used to pay for shares of stock. Even if it be said that the check might have been passed by endorsement in payment for the stock, the payee certainly was clothed with the power to cash it, and even with the right to do so, for the purpose of making payment. Moreover, it was intended by Mrs. Garrigus that the paper should be cashed by Borchers, Glarke & Co. and not by appellant. That is conclusively shown by the manner in which it was drawn. Appellant could not have gotten the money on it, at least not until after it had gone through the hands of Borchers, Clarke & Co. Therefore, in strictness, as it appears to us, it may possibly be said that the check was not delivered to appellant to be held, even momentarily, for Mrs. Garrigus, but to be held for Borchers, Clarke & Co., that is, that within the meaning of the law of embezzlement appellant may not have been her agent or bailee, but the agent of the payee of the check. Here it is to be observed that the indictment does not charge and there is nothing in the evidence to show that appellant, in dealing with Mrs. Garrigus, was masquerading under the name of a corporation—if that is what the concern named was—the title of which entity contained a word which was the same as his own surname. Under all the circumstances

“Upon these reflections it appears to us, as already stated, that the evidence failed to disclose several of the elements which we have above set forth as necessary to a conviction upon a charge of embezzlement. In the first place, it was not shown that appellant converted the check, the only property to which the charge against him related, and it follows also from this failure of proof that there was no showing of an intent on the part of appellant to deprive Mrs. Garrigus of the check unlawfully. It may be doubtful also— but we express no opinion on what immediately follows— whether appellant was, under the law of embezzlement, the agent or bailee of Mrs. Garrigus in receiving the check and in holding it on its way to Borchers, Clarke & Co., or whether, as between the prosecuting witness and appellant, the check belonged to her, within the meaning of that law, while he held it. It seems to us, then, that the evidence did not sustain the conviction on the first count. . . .

[4] “Appellant contends that the evidence was insufficient to sustain the verdict under the fifth count of the indictment. In that count he was charged, while acting as the agent and bailee of Mrs. Garrigus, with the embezzlement of a certain check or order for $800 signed by her and payable to the order of Borchers, Clarke & Co., Inc. This was the evidence produced in support of the charge: Mrs.

“It is also contended by appellant that the evidence fails to sustain the conviction under the ninth count of the indictment. This count departs from the affairs of Mrs. Garrigus and charges that appellant embezzled property of one H.

“Appellant contends that parts of the trial judge’s charge to the jury were erroneous on the ground that they amounted to instructions upon matters of fact. It is also claimed that certain of the court’s instructions in effect told the jury that its members might disregard other instructions which the court gave as to the law. These contentions are to our minds so clearly untenable that we forbear further to mention them.

“Still other points are made, but they are either disposed of by what has been said concerning the particular questions which we have thoroughly discussed, or they relate to appellant’s conviction under counts of the indictment as to which a reversal will be ordered for the reasons above given.”

Appellant contends that the evidence addressed to count three is insufficient to support a conviction thereon for the reason that when the prosecuting witness parted with the instrument to him it was a mere scrap of paper and not a note. As the indictment charged appellant with the embezzlement of a $4,000 promissory note payable to Myra J. Borchers, it is urged by appellant that the instrument when delivered to him did not answer that description and therefore the conviction under count three was improper.

We are of the opinion that the conviction under this count of the indictment may be affirmed without determining

Shenk, J., Richards, J., Seawell, J., Curtis, J., and Waste, C. J., concurred.

Rehearing denied.