Case ID: nc_134/html/0663-01.html
Source: Caselaw Access Project
Author: {"author": "WaleeR, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

STATE v. DUNN.
    (Filed March 16, 1904).
    1. ASSOCIATIONS — Benevolent Associations — Embezzlement — The Code, sees. 101Jh 1017, 724, 76Jh 1399, 1402,1617, 1618, 1865, 1868.
    
    An association organized for the benefit of its members solely is not a benevolent or religious association under see. 1017 of The Code.
    2. ASSOCIATIONS — Benevolent Associations — The Code, see. 1017■— Embezzlement.
    
    The treasurer of an association having rendered a statement of his receipts and expenditures thereby complied with the provisions of The Code, sec. 1017, requiring him to render an “account,” and is not guilty of embezzlement.
    
      3. ASSOCIATIONS — Statutes—Construction—Embezzlement.
    In see. 1017 of The Code the words “benevolent” and “religious” qualify the words “society” and “congregation” as well as “institution.”
    INDICTMENT against O. E. Dunn, heard by Judge George II. Brown and a jury, at November Term, 1903, of the Superior Court of Lenoir County.
    From a verdict of guilty, and judgment thereon, the defendant appealed.
    
      Robert D. Gilmer, Attorney-General, and Land & Gowper for the State.
    
      N. J. Rouse, Lofiin & Varser, and W. D. Pollock, for the defendant.
   WaleeR, J.

The defendant was indicted under section 1017 of The Code, in one count, for unlawfully lending, and in the other for unlawfully failing to account for money belonging to the Love and Union Society, an unincorporated body or association of individuals. The members paid an initiation fee and monthly dues, and in this way the necessary- funds were raised for the uses of the society, which was formed “for extending aid to sick members and their families and to defray the expenses of burying their dead.” The defendant was a member of the society and was elected treasurer. In his official capacity he received the funds of the society, and when demand was made by the proper authority upon him to account and pay over the money to his successor he refused to pay the money, though he presented a statement of the amount in his hands, and this appears to have been correct and to have been satisfactory to the trustees.

We deem it necessary to consider only one or two of the questions involved in the case in order to dispose of this appeal.

The defendant’s counsel requested the Court to charge the jury that the Love and Union Society is not such a benevolent institution or organization as is described in section 1017 of The Code, and that they should therefore acquit the defendant. The Court refused to give this instruction, but charged the jury that if they believed the testimony beyond a reasonable doubt, it is established that the Love and Union Society is a society or congregation within the meaning of that section of The Code; that the words “benevolent” and “religious” are adjectives qualifying the word “institution,” but not the words “society or congregation.” The Court further charged that if the jury believed the testimony beyond a reasonable doubt, the defendant, as treasurer of the society had failed to account for and pay over the said money to the proper officers, and therefore that he is guilty under the second count. The defendant excepted to the refusal to give the instruction and also to the charge. The jury convicted the defendant, and from the judgment upon the verdict he appealed.

' In this construction of the statute we cannot concur. The society was organized for the mutual benefit and advantage of its members and was not “benevolent” within the ordinary meaning and acceptation of that word. Webster defines benevolent to mean, “Having a disposition to do good; possessing or manifesting love to mankind and a desire to promote their prosperity and happiness; disposed to give to good objects; kind; charitable.” Substantially the same definition is given in the other standard dictionaries. Black, in his Law Dictionary, defines benevolence as the doing a kind or helpful action towards another, under no obligation except an ethical one. He says it will include all gifts prompted by good will or kind feeling towards the recipient, whether an object of charity or not. A benevolent society of course is one organized for benevolent purposes. He defines a benefit society as one which receives periodical payments from its members and holds them as a fund to be loaned or given to those of the members needing pecuniary relief. “The essential difference between a benevolent association and a beneficial society, in the strict irse of those terms, is that the former has for its object the conferring of benefits without requiring an equivalent from the one benefited, and in that sense it may be a charity.” 3 Am. & Eng. Ency. (2 Ed.), p. 1043. In the case of Attorney-General v. Critchett, 37 Minn., 13, an association was organized as a “benevolent” one under a special statute for the purpose of endowing the wife of each member on his marriage with a sum equal to as many dollars as there were members. The Court, in passing upon the validity of its incorporation, said: “It is clear from the plan of the association that it was not intended to bestow any benefit or help without what was thought to be an equivalent,” and the Court therefore held that it could not be a “benevolent society” within the ordinary or legal meaning of those words. And so in another case, in which the association was in all essential respects like the one described in this case, the same Court said that “the undertaking is not in any sense benevolent, but is for a quid pro quo; it is paid for. It is no more a benevolent society than any mutual insurance company, or other mutual company, or any partnership of which one member undertakes to do something for the pecuniary advantage of another member, in consideration of the undertaking of the latter to do a like thing for him.” Foster v. Moulton, 35 Minn., 458; Beam Benev. Soc., section 44. The law upon the subject is clearly stated in Gorman v. Russell, 14 Cal., 531. In that case it appeared that certain persons of a particular avocation associated and agreed that each should contribute a certain fixed sum to the common treasury, which sum, consisting of initiation fees and dues, was to be applied in certain events, as in sickness, etc., to tbe relief of tbe necessities or wants of tbe individual members or of tbeir families. Tbe Court beld that it was not a benevolent society, nor a charity, any more than an assurance or benefit society is a charity, and that it was simply a fair and reciprocal contract among tbe members to pay certain amounts under certain contingencies to each other out of a common fund.

It is perfectly clear in our case that tbe members of tbe society united for tbe purpose of mutual benefit and advantage, and not merely from motives of charity, or with tbe desire or tbe design merely of doing good to others, which would seem to be tbe very essence of benevolence. Tbe object of tbeir organization was a most commendable one, but though it was laudable in its purpose, it was not for that reason benevolent. Tbe statute (Tbe Code, section 1017) being a penal one must be construed strictly. We are of tbe opinion therefore that tbe Court erred in refusing to give tbe instruction prayed for by tbe defendant, and in tbe instruction given to tbe jury to tbe effect that tbe Love and Union Society was a benevolént society within tbe meaning of section 1017 of Tbe Code.

We think there was also error in tbe instruction that tbe adjectives “benevolent” and “religious” do not qualify tbe words “society and congregation.” Tbe general arrangement of tbe section and of those particular words with respect to each other, and tbe punctuation, clearly indicate that tbe purpose was to protect only benevolent or religious institutions and benevolent or religious societies or congregations, and it was not intended that tbe section should apply to any society regardless of its being either of a benevolent or religious character. We observe that tbe word “congregation” is used in tbe indictment in describing tbe society. Tbe evidence does not disclose Avlry this word was so used. It may be that it is a religious society or congregation in fact, though, the proof does not show it to be such. If it is, then of course the case would come within the provisions of that section of The Code, but it may be necessary in that event to send another bill, so that the allegations can be made to correspond with the facts as they will be shown at the next trial.

If the defendant is not indictable under section 1017, it may be that he is amenable to the law under section 1014. We do not think that the words “fail to account,” as used in section 1017, refer to any failure to pay upon demand what is in the hands of the fiduciary, but only require that he shall render an account or statement of the funds, and, too, an itemized account if required, in order that it may be known what disposition he has made of the funds entrusted to him. An account is defined to be “a statement in writing of debts and credits, or of receipts and payments; a list of items of debts and credits, with their respective dates.” Black’s Dictionary, p. 17. In our statutes the word is used in this sense and, when not only an account but payment or settlement is intended, additional words are used to express that idea. The Code, sections 724, 764, 1399 to 1402, 1617, 1618, 1865, 1868. In this case the defendant seems to have rendered what was accepted by the prosecutors as a satisfactory account, but the Court charged that if he failed to pay on demand he had not complied with the requirement of the law. We do not think this is so. A failure to pay or settle on demand would be an .unlawful conversion, and, if done with a dishonest, corrupt or fraudulent intent, would be embezzlement, which particular offense is indictable and punishable under section 1014. It is for this reason that we have suggested that the defendant may be indictable under the latter section. If so there must be a separate bill, as counts under e,ach of the sections 1014 and 1017 cannot be united in the same bill. State v. Watts, 82 N. C., 656. The fact that the defendant is a member of the society may seem to present an obstacle in tbe way of bis successful prosecution under section 1014, but it seems to be settled by tbe authorities that where a member of an unincorporated society receives money of tbe society, not in bis capacity merely as a member, but in trust or as a fiduciary, be will be criminally liable for any embezzlement of tbe money so held by him. Having acquired it by virtue of tbe confidence reposed in him, any fraudulent conversion of it is indictable, although, as a member of tbe society, be may be one of tbe joint-owners of tbe money and bis conversion of it therefore would not, at common law, have been criminal. McLain Grim. Law, section 631; Reg. v. Woolley, 4 Cox C. L. C., 251, 255; Reg. v. Turberville, Ibid, 13; Rex v. Hall, 2 Eng. Cr. Cases, 474; Reg. v. Proud, L. & C., 97; Reg. v. Murphy, 4 Cox Cr. L. Cases, 101. In Reg. v. Woolley, supra (p. 251), tbe defendant was indicted for embezzling funds, tbe property of E. M. B. and others, bis partners (members of Eriendly Society), and pleaded that be could not be convicted because be was a member of tbe society; tbe ’ Court said: “Even assiuning that tbe prisoner, being himself one of tbe members, wras included in tbe -words ‘others,’ that point was taken in a case before Mr. Justice Erie, at tbe last Monmouth Assizes (Rex v. Tuberville, supra), and that learned Judge ruled that be should consider tbe prisoner included or excluded in the word ‘others,’ as tbe justice of tbe case might require.” Tbe same principle is laid down in Laycock v. State, 136 Ind., 217, in which tbe Court says: “The fund in question was set apart and devoted to charitable and benevolent purposes. Tbe appellant was made tbe trusted agent of tbe association, charged with tbe duty of preserving its funds for tbe use of tbe needy and distressed brothers of tbe order, and an answer by him to a charge of fraudulent' conversion that be bad an equal interest with the others therein, and no one bad a right to complain because there was no principal entitled to its recovery, does not find support under existing statutes. This money having been dedicated to the wants of the sick and helpless, the trustee had no right to profane or violate a sacred trust in the manner charged, and for such he is answerable. The act of embezzlement may be perpetrated as well against the property of an association as of a corporation.” We see therefore that the technical rule of the common law that, in general, a party having a right of property in goods, and also a right to the possession, cannot be guilty of larceny, and consequently that tenants in common, joint tenants and partners, cannot be guilty of stealing their own property (Roscoe Or. Ev., p. 626), seemis not to apply to a case of embezzlement by one who has received the property in trust and confidence to apply it to certain specific uses. We merely'call attention to this principle for the purpose of showing the difference between section 1014 and section 1017 of The Code, the latter referring only to the unlawful lending of money or failing to “account” for the same when received in trust for a benevolent or religious institution, society or congregation, and the former to the fraudulent conversion of the same (evidenced by the failure to pay over on demand) when received in trust for any corporation, person (or persons by The Code, section 3765 [1]), or copartnership.

Whether the prosecution can be successfully maintained under the present indictment, and whether it is advisable to send a bill under section 1014, are matters which we leave entirely to the consideration of the learned and able Solicitor who prosecutes in behalf of the State in the district from which the case has come to this Court.

We only decide now that there was error in the rulings of the Court as above indicated, and because thereof there must be another trial.

New Trial.