Case ID: sw_184/html/0204-01.html
Source: Caselaw Access Project
Author: {"author": "HARPER, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MEREDITH v. STATE.
    (No. 3946.)
    (Court of Criminal Appeals of Texas.
    Feb. 23, 1916.
    Rehearing Denied March 22, 1916.)
    1. Embezzlement &wkey;>30 — Indictment—Sufficiency.
    In a prosecution under Pen. Code 1911, art. 691, making an insurance agent who collects premiums and converts them to his own use guilty of larceny, it is not necessary to allege the ownership of the money in any particular person; the statute being provided to cover the condition wherein actual ownership cannot be alleged.
    [Ed. Note. — For other cases, see Embezzlement, Cent. Dig. §§ 44, 45; Dec. Dig. &wkey;>30.]
    2. Statutes <&wkey;118(l) — Enactment — Sufficiency of Title.
    Acts 31st Deg. c. 108, § 51 now (Pen. Code 1911, art. 691), entitled “an act to regulate the business of insurance companies and providing-penalties for violations of the provisions of the act,” is not void because of insufficient title ; the title properly including prosecutions ©f insurance agents for larceny by embezzling premiums paid.
    [Ed. Note. — For other eases, see Statutes, Cent. Dig. §§ 158, 159; Dee. Dig. &wkey;118(l).j
    3. Embezzlement &wkey;>30— Indictment — Description of Parties — Sufficiency.
    While an indictment for larceny by embezzlement must allege that the defrauded party was a corporation, if that was the fact, it is not necessary to allege that other corporations interested but not defrauded were corporations.
    [Ed. Note. — For other cases, see' Embezzlement, Cent. Dig. §§ 44, 45; Dec. Dig. <&wkey;>30.]
    4. Indictment and Information <&wkey;61 — Alleging Matters Judicially Noticed — Description of Parties.
    An indictment for larceny by embezzlement, alleging that the accused was an agent for a life insurance company lawfully doing business in the state, was equivalent to an allegation that it was a corporation, since the act regulating insurance companies and requiring their incorporation is a general law of which the courts must take judicial notice.
    [Ed. Note. — For other cases, see Indictment and Information, Cent. Dig. § 183; Dec. Dig. &wkey;?61.3
    5. Embezzlement <&wkey;42 — Evidence—Admissibility.
    Where one accused of larceny by embezzlement testified that the applicant for insurance called on him and he told him that his application had been canceled and he would have to see the state agent for a return of the premium, the state agent could testify that the applicant called and did receive the premiums.
    [Ed, Note. — For other cases, see- Embezzlement, Cent. Dig. § 64; Dec. Dig. <&wkey;>42.]
    6. Embezzlement &wkey;>38 — Evidence—Admissibility.
    In a prosecution for larceny by embezzling insurance premiums, the contract under which the accused was working for the insurance company was admissible; its terms being binding upon him.
    [Ed. Note. — For other eases, see Embezzlement, Cent. Dig. §§ 61, 65, 66; Dec. Dig. &wkey;>
    7. Criminal Law <&wkey;400(7) — Best Evidence —Admissibility.
    While an agent cannot testify as to the contents of his contract, he may testify that he did make a contract of employment with the principal.
    [Ed. Note. — For other cases, see Criminal Law, Cent. Dig. §§ 879-8S6; Dec. Dig. <&wkey;> 400(7).]
    8. Criminal Law &wkey;>447 — Parol Evidence to Vary Writings — Admissibility.
    Where a contract of employment is in writing and specifically stipulates the amount of commissions to be paid, oral testimony as -to the amount of commissions' is inadmissible.
    [Ed. Note. — For other cases, see Criminal Law, Cent. Dig. §§ 1029-1031; Dee. Dig. t&wkey;> 447.]
    9. Embezzlement <&wkey;38 — Evidence—Admissibility.
    Where one accused of having embezzled insurance premiums testified that he had received a premium and had paid it to no one, it was not error to admit testimony of his superior that he had not- received it or permitted defendant to appropriate it.
    [Ed. Note. — For other cases, see Embezzlement, Cent. Dig. §§ 61, 65, 66; Dec. Dig. &wkey;>
    10. Embezzlement &wkey;>14 — Elements — Offenses.
    An insurance agent receives premiums under the conditions of his employment, and under no circumstances may he appropriate them to his own use, so that failure of the applicant to sign a new application as required by the company would not affect his guilt in appropriating the premiums.
    [Ed. Note. — For other cases, see Embezzlement, Cent. Dig. §§ 13-15; Dec. Dig. &wkey;>14.j
    11. Embezzlement <&wkey;48(2) — Instructions— Issues.
    In a prosecution for embezzlement of insurance premiums, where the agent himself testified that he had received them and had paid them to no one but had spent the money, the issue of good faith in retaining the money was not involved, and an instruction thereon was properly refused.
    [Ed. Note. — For other cases, see Embezzlement, Cent. Dig. § 73; Dec. Dig. &wkey;»48(2).]
    12. Embezzlement <&wkey;22 — Character of Offense — Mitigation.
    Although an insurance agent accused of embezzling premiums could have retained 40 per cent, thereof, had the policy been issued, that would not reducg the crime from a felony to a misdemeanor, where the policy was not in fact issued and he never became entitled to any of the premium.
    [Ed. Note. — For other cases, see Embezzlement, Cent. Dig. § 30; Dec, Dig. &wkey;>22.]
    13. Embezzlement <&wkey;47 — Character of Offense-Mitigation .
    In such case, the question of joint ownership of the premium by the insurance company and the accused was not involved and was properly withheld from the jury.
    [Ed. Note. — For other cases, see Embezzlement, Dec. Dig. <S=>47.]
    Appeal from District Court, Medina County; R. H. Burney, Judge..
    W. R. Meredith was convicted 'of larceny by embezzlement, and he appeals.
    Affirmed.
    De Montel & Fly, of Hondo, and John R. Storms, of San Antonio, for appellant. O. C. McDonald, Asst. Atty. Gen., for the State.
   HARPER, J.

Appellant was prosecuted and convicted under an indictment, omitting formal parts, alleging that:

Appellant “was an insurance agent and solicitor, to wit, an agent and solicitor for the ¿Etna Life Insurance Company, of Hartford, Conn., which was then and there a life insurance company lawfully doing business in the state of Texas, and of which J. N. Houston was the manager for the state of Texas; and. the said W. R. Meredith, as such agent and solicitor, did then and there collect premiums and was authorized to collect premiums for the said /Etna Life Insurance Company; and he, the said W. R. Meredith, as such agent and solicitor aforesaid, did then and there collect and receive from one Frank Posey the sum of $68 in current money of the United States of America, of the value of $68, as a premium on a policy of life insurance in said ¿Etna Life Insurance Company; and he, the said W. R. Meredith, did then and there unlawfully and fraudulently convert, misapply, and appropriate to his own use the said money so received and collected by him as such agent and solicitor as aforesaid, contrary to the instructions of and without the consent of the said ¿Etna Life Insurance Company, and contrary to the instructions and without the consent of the said J. N. Houston, who was then and there the manager for the state of Texas for said ¿Etna Life Insurance Company, which said money had theretofore come into the possession of and was under the care of the said W. R. Meredith by virtue of being such agent and solicitor for said ¿Etna Life Insurance Company, as aforesaid, against the peace and dignity of the state.”

This indictment was brought under article 691 of the Penal Code, which reads:

“Any insurance agent or solicitor who collects premiums for an insurance company lawfully doing business in this state and who embezzles or fraudulently converts or appropriates to his own use, or with intent to embezzle, takes, secretes or otherwise disposes of or fraudulently withholds, appropriates, lends, invests or otherwise uses or applies, any money or substitutes for money received by him as such agent or broker, contrary to the instructions or without the consent of the company, for or on account of which the same was received by him, shall be deemed guilty of theft of property of the value of the amount involved in either case and shall be punished accordingly.”

Appellant was agent of the ¿Etna Life Insurance Company, and collected from E. M. Posey the sum of $68.34, issuing to Posey the following receipt:

“Hondo, Tex., Oct. 15, 1914.
“Received from E. M. Posey, of Hondo, Texas, cash ($68.34) sixty-eight and sVioo dollars, to be applied to payment of the first premium under a policy of $21)00.00 this day applied for in the ROtna Life Insurance Company, when said policy is issued. It is hereby understood and agreed that insurance under said policy shall commence at the time it is issued, and that in case the application shall not be approved by the company, and a policy is not issued, the said payment shall be returned on surrender of this receipt within sixty days from the date hereof; and said company shall not be bound to any contract of insurance until a policy is issued.
“Not binding unless countersigned by a duly authorized agent of the company.
“Countersigned at Hondo, Tex., this 15th day of October 1914.
“[Signed] W. R. Meredith, Agent.
“C. E. Gilbert, Secretary.
“In every instance when the entire first premium is paid either in cash or by note, pending the issue of a policy, this form must be executed in duplicate, the applicant retaining the original, the duplicate being forwarded at once to the company.”

It was the appropriation of this money by appellant to his 'own use upon which the indictment is based. It is thus seen that appellant received this money as agent of the life insurance company upon the express condition that he would pay it to the company when the policy was issued, or, if no policy was issued on Posey’s application, he, as agent Of the company, would return it to Posey upon the surrender of the receipt in 60 days. Under the contract he had with the company, and the receipt he issued to Posey, he held this money in trust upon the given conditions named, and under the contract the life insurance company did not become absolute, owner 'of it until a policy was issued to Posey on the application, nor could it maintain suit for it until the happening of that condition. However, while Posey had a reversionary interest in the money, in case no policy was issued on the application, yet he had no control over it, nor right to demand its return until the application for insurance was refused by the company. Under such circumstances, it was an impossibility to allege the ownership of the money in any one individual, and the Legislature adopted the above statute to reach just such conditions, and under this statute it is unnecessary to allege in the indictment specifically who was the owner of the money, but to allege, as was done in this indictment, that as agent of the life insurance company appellant had collected from Posey the money as premium on a policy, and while holding it as such agent did fraudulently convert to his own use the money so held without the consent of the life insurance company. Appellant could not and would not have any personal interest in the money, at least, until the policy was issued, under the terms of his contract with the company, and the money would be in his hands merely as a trust fund; it to belong to the company in case it accepted the application for insurance and issued a policy thereon. Then, and not until then, would appellant be entitled to any of it as commission. In case no policy was issued on the application, he was entitled to and would receive no commission out of the money; but, by the terms of the contract under which he received the money, hé, as' agent of the company, bound himself to return all of the money so received to Posey, the applicant for insurance, and the Legislature had the authority to declare the conversion of the money to his own use by the person holding same under such circumstances to be an offense, and has done so.

The contention that the act of 1909 is unconstitutional and void, on the ground that the caption is insufficient, cannot be sustained. The caption is on page 192, Acts of 1909, it being chapter 108, and is, in effect, a codification of the laws governing and regulating the doing of a life insurance business in this state. The section defining this offense is section 51 of that act, and, among other tilings, the caption declares that it is intended “to regulate the business of such companies, and providing penalties for violations of the provisions of the act.”

The only other serious contention as to the validity of the indictment is based upon the contention that it failed to allege whether or not the ¿Etna Life Insurance Company was a joint-stock company, partnership, or corporation. This question has been frequently before this court, and at one time it was held that it was not necessary in any case to allege that the Injured party was a corporation. The case of Price v. State, 41 Tex. 215, was a case in which Price was charged with the theft of a bale of cotton from the Houston & Texas Central Railroad Company, and our Supreme Court, in an opinion by Chief Justice Roberts, held:

“It was not necessary to set out the charter in the indictment, or to allege it to be a chartered company otherwise than by name, as was done in this case.”

In the case of Holloway v. Memphis R. Co., 23 Tex. 467, 76 Am. Dec. 68, Chief Justice Wheeler disicusses at length when it is necessary to allege in the pleadings and prove that the plaintiff is a body corporate. He held that if the general laws of the state so declared, and the court in consequence must of necessity take judicial notice of it, it was not necessary to so allege and prove;! but if incorporated by private act it must be alleged to constitute good pleading and proven on the trial. Since its organization the question came before this court in a theft case, in the case of White v. State, 24 Tex. App. 234, 5 S. W. 859, 5 Am. St. Rep. 879, and the court discussed it at some length, and held:

“We are of the opinion that such allegation is requisite, and, to say the least of it, it is beyond doubt the better practice.”

Since the decision in that'case, it seems to have become the settled law in this state that, where the alleged injured party is a corporation, it must be alleged that it is a corporation, or words of equivalent import used. In Thurmond v. State, 30 Tex. App. 540, 17 S. W. 1098, an indictment was held defective because it failed to allege that the Lexington Ranch Company, from whom the property was stolen, was a corporation. See, also, Stallings v. State, 29 Tex. App. 220, 15 S. W. 716; Hutton v. State, 38 S. W. 209; Roby v. State, 41 Tex. Or. R. 152, 51 S. W. 1115.

On the other hand, it has become equally well settled that such rule is not applicable where the failure to allege it was a corporation was in regard to a corporation other than the defrauded one. In Reeseman v. State, 59 Tex. Cr. R. 430, 128 S. W. 1126, the question was again before the court, and the authorities were reviewed, and the distinction drawn when it is and when it is not necessary to allege in the indictment that the named company is a corporation, partnership, or joint-stock company. Under all the decisions of this court, it seems to be the settled rule that it was necessary to allege that the ¿Etna Life Insurance Company, as it was the company alleged to be defrauded, was a corporation, unless the statutes of this state give us judicial knowledge that it was an incorporated company. The insistence of the state is that the general statutes of this state do give this and all other courts judicial knowledge that only an incorporated company can legally do a life insurance business in this state, and when the indictment alleged that appellant was “an agent for the ¿Etna Life Insurance Company, which was then and there a life insurance company lawfully doing business in the state of Texas,” it was equivalent to an allegation that it was an incorporated company, for no company other than an incorporated company could lawfully do a life insurance business in this state; and chapter 108 of the Acts of the Thirty-First Legislature (Sess. Acts, p. 192) seems to support such contention. We are therefore of the opinion the court did not err in refusing to quash the indictment, nor in refusing to sustain the motion in arrest of judgment. The act in question is a general law, and this court and all courts must take judicial cognizance of its provisions. Article 463 of the Code of Criminal Procedure (1895) provides that “matters of which judicial notice is taken need not be stated in an indictment.” Por a citation of authorities, see section 373, White’s Ann. Code of Crim. Proc.

In two bills of exception appellant complains of the court permitting J. N. Houston, state agent of the ¿Etna Life Insurance Company, and F. M. Posey, to testify that he (Houston) had paid Posey back the $68.34 collected by appellant from Posey. Appellant himself testified that, when Mr. Posey called on him about the matter, he told him his contract with the company had been canceled, and he (Posey) “would have to take the matter up with Mr. Houston.” Under such circumstances, it was permissible for Posey to testify he did take it up with Mr, Houston, and received his money back.

Nor was there any error in permitting Mr. Houston to testify he and appellant entered into a contract, and identify the contract. It was dated at Austin, Tex., March 24, 1913, signed, “J. N. Houston, manager,” and indorsed:

“I hereby accept the foregoing appointment, subject to all its terms and conditions, W. R. Meredith, Agent.”
It is also indorsed:
“The ¿Etna Life Insurance Company hereby agrees to this appointment. [Signed] ¿Etna Life Insurance Company, by Frank Buslinell, Agency Secretary” — and dated April 14, 191,3.

This is the original contract under which appellant was working, was accepted by him,' and its terms are binding on him, and theire was no error in admitting it in evidence. i

As to the contract between Mr. Houston and tile ¿Etna Life Insurance Company, be was not, permitted to testify as to its contents, but only that he was state agent of the company. There was no error in permitting Mm to so testify. Of course, had he undertaken to testify as to the contents of the contract under which he was appointed state agent, then the contract would have been the best evidence. But the contents of the instrument were not sought to be proved; only the fact that he was state agent, and had entered into a contract with appellant, and then prove up the contract which appellant had entered into.

As the contract was in writing and specifically stipulated the amount of commission appellant was to receive upon each character of policy, there was no error in-refusing to admit oral testimony as to the amount of commission he was to receive. Appellant Mms'élf testified, “As to the commission allowed, it is defined in the contract.”

Nor was there any error in permitting Mr. Houston to testify that appellant had paid Mm no money on the Posey application. Appellant himself testified that he received the money from Mr. Posey, and issued Mm the receipt hereinbefore copied; that he had not paid the money to any one. He said:

“As to what I did with that money, I was ■waiting until the application, the examination, was finished. I had the money all the time. As to whether I still have the money, no; I have no recollection of what became of that particular money.”

Nor was there any error in permitting Mr. Houston to testify that he had not given appellant permission to appropriate the $68.34. Appellant, in the contract he entered into with Mr. Houston as manager of the ¿Etna Life Insurance Company, over Ms signature had agreed:

“That all moneys collected by you under the terms of this appointment shall constitute a trust fund, separate and distinct from your other funds and not subject in any case to personal or any other use by you, and that such moneys shall be immediately paid over to the said manager of said company.”

Mr. Houston was the manager named in that contract and under this contract it was permissible for the manager named in the contract to testify that appellant had not paid him the money, and he had not given appellant permission to appropriate it to Ms own use.

The evidence was ample to sustain the verdict, and the court did not err in so holding.

As appellant received the money from Posey in Ms capacity as agent of the insurance company, and issued to him the receipt hereinbefore copied, the fact that Posey failed to sign the second application, if he did do so, would not alter the conditions under which appellant held the money; and the court did not err in refusing to instruct the jury that if Posey did not sign the second application they would acquit appellant. Appellant had received the money as agent of the company under given conditions, and he, under no circumstances, would have the right to appropriate it to Ms own use.

If there was any testimony that appellant was holding the money until the ¿Etna Life Insurance Company had passed on Posey’s application for insurance, the charge presenting that issue should probably have been given. But there was no testimony presenting such issue. Appellant himself testified he did not have the money, he was not keeping it, and he did not know what he had done with that specific money. 1-Ie admitted he did not pay it to the insurance company or its manager, and did not give it back to Posey; and that he did not have it. Under such circumstances, there could be no question of his right to keep the money in his possession until Posey signed the application, and keep it in his possession to pay to the life insurance company when the policy was issued. He admitted he had not kept it, but spent it for some purpose he could not name. The facts in this case show that appellant received the money from Posey while agent of the company, and issued him a receipt as agent of the company. He never sent an application to the company to act on, and if, in fact, Posey did not sign the application (although Posey swears he did), this would not and could not alter the capacity in which appellant held the money, and, when the evidence goes further and shows that he had violated the trust and converted to Ms own use and benefit the money, there could be no question of good faith on appellant’s part, when both Mr. Houston and Mr. Posey testify they gave him no permission or authority to use the money for his own benefit. If he still had the money in his possession, and he contended he was holding it in good faith under Ms construction of the contract then such an issue might be in the case. But when he testifies he had spent the money without authority to do so from any one, the question of good faith in the retention of the money does not arise on the evidence.

Appellant also contends that under the contract he was entitled to retain 40 per cent, of the premiums collected as his commission, and if he did appropriate the $68.34, as he was entitled to 40 per cent, of the amount, if guilty of any offense, he would only be guilty of a misdemeanor, and the court should have so instructed the jury. If the condition had arisen whereby appellant was entitled to a commission, there would be merit in Ms contention. But under the contract, under the receipt, and under appellant’s own testimony, he became entitled to no commission until a policy had been issued and delivered to Mr. Posey. As appellant at no time ever sent an application of Posey for Msurance to the company, and he knew that no policy had been issued, he, under his contract, was entitled to no commission on this $08.34, and therefore, if he was guilty of any offense, it was a felony and not a misdemeanor, and the court did not err in so holding.

There was no question in the case of appellant and the insurance company being the “joint owners of the money collected by appellant from Posey.” The money was paid by Posey to appellant for a specific purpose, and he in his contract had agreed to hold it as a trust fund, to be paid to the company if a policy was issued on Posey’s application; if no policy was issued, to repay it to Posey. It is true, if the policy had been issued to Posey, he would then have been entitled to 40 per cent, of the amount as commission for his services. But as no application of Posey’s was ever sent to the company by appellant, he could and would under no circumstances be entitled to any part of the money, and the court did not err in refusing to submit- that issue to the jury.

We have carefully reviewed the exceptions to the charge of the court, and they nor neither of them present any error. They have been sufficiently discussed in disposing of the foregoing questions and do not necessitate nor require further discussion of the propositions.

The judgment is affirmed. 
      <@s»For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes