Court Opinion

ID: 9468590
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:18:35.949224+00
Date Added: 2024-06-11T17:40:56.613670
License: Public Domain

MacKINNON, Circuit Judge,
(concurring specially).
I concur in Parts I and IV of Judge Robinson’s opinion. In my analysis the evidence does support a conviction for embezzlement as well as for the included offense of willful misapplication. In reaching that conclusion I give neither the statute (18 U.S.C. § 656) nor Moore v. United States, 160 U.S. 268, 269-70, 16 S.Ct. 294, 295, 40 L.Ed. 422 (1895) the highly restrictive construction that is urged in appellant’s brief and adopted by Judge Robinson’s opinion. Courts have affirmed convictions of embezzlement where the accused had “control by virtue of a position of trust” as well as where there was actual “prior lawful possession” of the property. The defendant here had all the means for effective access to and control of the money by virtue of a special trust placed in her by her employer. Consequently, when she used her access and control to convert that money to her own use in violation of that trust she committed embezzlement as well as willful misapplication. Moore v. United States, supra, defines “embezzle” expansively to include
the fraudulent appropriation of property by a person to whom such property has been intrusted or into whose hands it has lawfully come. It differs from larceny in the fact that the original taking of the property was lawful, or with the consent of the owner, while in larceny the felonious intent must have existed at the time of the taking.
160 U.S. at 269 — 70, 16 S.Ct. at 295 (emphasis added). Thus, Moore extends embezzlement to those situations where the property has been “intrusted” to the accused’s control or custody as well as to those situations where the property “has lawfully come” “into [the accused’s] hands.”
The statute construed in Moore provided that “any person who shall embezzle, steal, or purloin any . . . property of the United States, shall be deemed guilty of felony.... ” Id. 16 S.Ct. at 295 (emphasis added). The language of such statute was identical in relevant part to the then-exist*1108ing bank embezzlement statute, codified as R.S. § 5209:
Every president, director, cashier, teller, clerk, or agent of any association, who embezzles, abstracts, or willfully misapplies any of the moneys, funds, or credits of the association . . . shall be deemed guilty of a misdemeanor....
Relying in part on two embezzlement cases decided under § 5209,1 the Moore Court concluded that the embezzlement indictment before it should have alleged that the money embezzled came into the accused’s possession by virtue of his employment. The Court did not demand more. There was no requirement that there be actual prior and lawful possession;2 it was enough, the opinion implies, that the stolen property had been “intrusted” to the defendant’s special care. There is no reason to believe the scope of embezzlement under the statute construed in Moore would be any broader than it was under § 5209, the predecessor to the statute we now consider. In fact because the charge rested solely on the word “embezzle” the decision in Moore dealt with a less expansive statute than 18 U.S.C. § 656 which is involved here.
Following Moore, revisions to § 5209 have made more explicit the trust concept of embezzlement that Moore recognized. The present statute provides:
Whoever, being an officer, director, agent or employee of . . . any [bank covered by this statute,] ... embezzles, abstracts, purloins or willfully misapplies any of the moneys ... of such bank or any moneys . . . intrusted to the custody or care of such bank, or to the custody or care of any such agent, officer, director, [or] employee . . . shall be fined not more than $5,000 or imprisoned not more than five years, or both . . .
18 U.S.C. § 656 (emphasis added). Under the present statute, embezzlement clearly extends to property entrusted to one’s “custody” or “care” as well as to property in one’s actual lawful possession.3 That conclusion is fortified by reference to some of the numerous state decisions that have explicitly extended embezzlement to custody and care situations.
II
These state decisions hold that embezzlement may be committed by one who has control of property by virtue of a trust even if he lacked actual possession of the property or took possession without authorization. Most of the cases involve state statutes that in effect adopt the trust concept which is set forth in Moore and which is also evident in the language of § 656. These statutes, by contemplating that embezzlement may be committed by conversion of property in the control of the accused by virtue of a special trust, do not require actual prior possession. But then neither is such possession required by the Supreme Court’s definitional decision in Moore or by the present language of § 656.
*1109Illustrative of embezzlement involving a breach of trust without prior actual possession are those cases where an agent who is authorized to administer his principal’s checking account makes unauthorized withdrawals and converts the funds to his own use. Although the agent comes into possession of the principal’s funds only by an unauthorized act, the majority of these cases hold that the agent has nonetheless embezzled, because he had control over the funds by virtue of his position of trust. See Annot., 88 A.L.R.2d 688, 689 (1963) (eases in which accused made out checks to his own creditor). E. g., Evans v. State, 343 So.2d 557, 560 (Ala.Cr.App.1977) (employee who had authority to issue and sign checks on his employer’s bank account drew check for his personal benefit). Evans indicates that money, the disbursement of which is entrusted to the defendant, is in his possession for purposes of embezzlement. The funds in such cases may be considered to be in the agent’s constructive possession. It remains, therefore, that actual possession may not be required where funds are entrusted to the accused’s care; and it may not be required that the accused come into the possession of the funds by an authorized act.4
In State v. Lamb, 125 N.J.Super. 209, 310 A.2d 102 (1973), the receiving clerk never had actual possession of the goods; nor was he authorized to sign false receipts. Yet the court held that he embezzled when he signed false receipts which enabled his friend to collect from the clerk’s employer for goods the employer never received: “Even though the goods may still have been on the [delivery] truck at the time, defendant, nevertheless, was able to exercise a sufficient measure of control over them so as to be in constructive, if not actual, possession of the goods on behalf of his employer.” Id. at 105. The court followed the Moore definition of embezzlement and affirmed the clerk’s conviction.
In a Louisiana case the statute proscribed as embezzlement any state officer’s conversion to personal use of public money “he is authorized to collect, or which may be entrusted to safe keeping or disbursement . . . . ” This statute recognizes the trust theory. Defendant, a sheriff and tax collector, in effect made improper expense reimbursement requests which the parish treasurer routinely honored by issuing the sheriff checks that were drawn on the Sheriff’s Salary Fund. Defendant averred he could not embezzle money he did not legally possess. The court answered that although the sheriff lacked physical possession or legal custody of the money in the salary fund, “for all practical purposes [he] was the legal possessor. He had and exercised exclusive control of it. . . . [U]pon the presentation of the Sheriff’s warrant, regular on its face, a duty devolved upon the treasurer to pay it, provided there were funds in the amount sufficient therefor.” State v. Doucet, 204 La. 79, 14 So.2d 917, 919 (1943).
McGlothen v. Commonwealth, 310 Ky. 48, 219 S.W.2d 1003 (1949) involved a defendant loan officer who conspired with an applicant to have the loan company issue a loan to a fictitious entity, with the two conspirators pocketing the loan proceeds. Defendant argued he had not embezzled because he obtained the proceeds from his employer unlawfully, with the intent to steal. The court disagreed, stating the “essential element [of embezzlement] is that the property came into [the accused’s] possession by virtue of his agency.” Id. at 1005. The underlying statute spoke of property in the employee possession or “placed in his care.” Id. This is merely a different phrasing of Moore's requirement that the property be “entrusted.”
Several Arizona decisions support the same theory. In State v. McCormick, 7 *1110Ariz.App. 576, 442 P.2d 134 (1968), the court affirmed a grand theft conviction on, among others, the ground that the evidence supported a conviction of embezzlement which was one example of grand theft. Arizona statutorily defined embezzlement as fraudulent appropriation of property in one’s possession or under one’s control by virtue of his trust. This definition in its trust concept follows Moore. The defendant was president of a fraternal society and had authority, with the society’s treasurer, to co-sign checks drawn on the society’s bank account. The treasurer exercised no discretion, and the president wrote unauthorized checks to himself. The president’s conviction of embezzlement was affirmed on the basis of his fiduciary relationship with the society: “As a consequence of such relationship, he obtained control of [the society’s] funds on deposit. . . . Actual possession of the money was not essential — it was sufficient that it was under the defendant’s control in the sense that it was under his direction or management.” Id. at 141.
The same statutes were applied in State v. Roderick, 9 Ariz.App. 19, 448 P.2d 891 (1969). Defendant was authorized to buy a plane for resale. He asked the seller to rebate the dealer’s discount in the form of a check payable to his order, and then pocketed the money instead of turning it over to his employer. Because defendant acquired the check under “color of authority (claiming to be [the buyer’s] agent in procuring the discount),” he gained the property by virtue of his trust, and by the misappropriation committed embezzlement. Id. at 894.
More recently, in State v. Malory, 113 Ariz. 480, 557 P.2d 165 (1976), a bookkeeper had authority to fill in the name of the payee in checks signed by the corporate officers in blank. Then after procuring the signatures of trusting corporate officers she filled in her own name instead. Defendant argued she had not embezzled because she obtained possession of the signed checks (and thus the money) not lawfully but by fraud. Rejecting this argument, the court held it was enough for embezzlement under Arizona law that defendant had control of the property by virtue of a trust relationship; she was able to perpetrate her scheme because her two years of responsible service induced the officers to trust to the honest performance of her duties. Id. at 167-68.
The Idaho Supreme Court relied on a similar analysis in State v. Lockie, 43 Idaho 580, 253 P. 618 (1927), in which an employee falsified expense accounts and drew checks on the company’s bank account in amounts greater than his actual expenses. The defendant emphasized that he had gained possession of the money by trick or fraud or trespass, and argued that his crime, if any, was therefore larceny rather than embezzlement. The court first opined that defendant’s argument would be flawed even under a statute requiring actual prior possession, for the defendant might be es-topped to assert his possession was unlawful.5 The court then relied on the Idaho statute, which stated that property is subject to embezzlement if it has come into the defendant’s “control or care by virtue of his employment . . . . ” That was the case in Loekie, for
[t]he property of the company, namely, its credit with the bank, was by virtue of defendant’s employment subject to his check, and was thus within his care and control .... There is no limitation upon the manner in which he may have obtained it, if he controls it by virtue of his employment.
This is nothing more than another application of the trust theory.
Ill
The foregoing representative cases strongly suggest that the common meaning of embezzlement is at least as broad as the Moore definition of 1895 and includes the aspect of control by virtue of a position of special trust. This kind of control may *1111exist apart from the element of “prior lawful possession,” as witnessed by the statutes specifying “possession or control.” Or it may exist as a concept subsumed within “possession,” as in those cases which speak of “constructive possession” as a sort of synonym for defendant’s control, and in those cases where the defendant is estopped to deny prior possession because he had gained possession under color of authority.
Some cases tend to support a narrow, technical construction of embezzlement. Dictum in Rohde v. United States, 34 App.D.C. 249 (1910), for example, emphasizes possession: the embezzler “commits no trespass or wrong in acquiring the possession, but a breach of trust in converting the property to his own use.” Id. at 253 (cited in Maj. op. at 1098 n.28). And dictum in United States v. Orbiz, 358 F.Supp. 200, 203 (D.P.R.1973) (Maj. op. at 1098 n.31) defines embezzle for § 656 purposes as taking property “which came into the wrongdoer’s possession lawfully by virtue of his office of employment or position of trust with the bank.” This definition, too, seems to make prior lawful possession an essential element but does incorporate the “trust” concept. A third case is United States v. Breese, 173 F. 402 (C.C.W.D.N.C.1909) (cited at 1098 n.31). There the court instructed the jury that embezzlement “is a breach of trust . . . with respect to moneys ... in possession of a party and entrusted to him by another .... ” Id. at 405-06 (emphasis added). Breese thus conjoins what Moore identifies as the disjunctive elements of (1) property entrusted (property under control by virtue of trust) and (2) property in actual prior lawful possession.
In United States v. Harper, 33 F. 471 (C.C.S.D.Ohio 1887) (cited at 1098 n. 31), however, the jury instructions recognized a broader conception of embezzlement. There, in the trial of a bank vice-president for embezzlement under § 656’s predecessor, R.S. § 5209, embezzlement was said to require “actual and lawful possession or custody ... by virtue of some trust . . . . ” The court further stated that it was not necessary that defendant’s custody or possession be exclusive. The subsequent taking would constitute embezzlement if the assets of the bank were actually or practically entrusted to the care and management of the defendant, so that, by virtue of his position . . . ., he had not merely access to, or a constructive possession of, but such actual custody of the funds as enable him to have and exercise control over the same.
Id. at 475-76 (emphasis added).
Virgin Islands v. Leonard, 548 F.2d 478 (3d Cir. 1977), and United States v. Sayklay, 542 F.2d 942 (5th Cir. 1976) are closest on the facts to the present case. In Leonard, the defendant was a civil defense storeroom employee who entered his employer’s office at night, took the storeroom keys from a universally known location, and stole chicken wire. The court reversed defendant’s embezzlement conviction under a statute covering property in a public officer’s possession or under his control “by virtue of his trust.” 548 F.2d at 480. The chicken wire was not under defendant’s prior control because he had no authority to exercise any dominion over the contents of the storeroom. He was like any other employee (including secretaries and part-time help) in knowing where the storeroom keys were, and he came into the storeroom (not under any color of authority but) like “a thief in the night.” Id.
Leonard is distinguishable from the present case because the Leonard defendant was like a janitor, as the court noted; he was not in a high position of trust as was Whitlock as an assistant cashier and assistant manager with the special trust powers that gave her access to the keys, the combination and the money. The Leonard defendant did not, like Whitlock, act under color of authority in getting access to the converted property. See also Warren v. State, 223 Ind. 552, 62 N.E.2d 624 (1945) (warehouseman who used his key to open warehouse and steal material is guilty of larceny rather than embezzlement; his was not a special position of trust).
In United States v. Sayklay, supra, the bank bookkeeper was able to perpetrate a *1112check fraud through her access, as bookkeeper, to a check encoding maching and blank checks. The Sayklay court held it was not enough that the defendant is entrusted with all the tools necessary to gain access to the funds; the defendant must be entrusted with the funds themselves, as a bank teller or bank president is. Whitlock differs from the Sayklay bookkeeper both in the degree of trust placed in her and in the fact that the bookkeeper had to perform an intervening unlawful act — fraudulent check encoding — whereas Whitlock here got her hands on the money simply by exercising her prerogatives as a bank officer and the access that she was given by virtue of her special trust duties.
IV
This brings us to Whitlock’s access to and authority and control over the money. Appellant attempts to play down her role of authority at the bank by terming herself a “note officer.” Actually she was much more. She was an “assistant cashier and assistant manager” (Tr. 18, 33), and necessarily had the authority and access within the bank that goes with those positions. In particular, she occupied a special position of trust along with two other bank officers who had the keys to the reserve vault (Tr. 18). Through these keys money could be obtained from the vault in conjunction with the manager who had memorized the combination thereto. Both the keys and the combination were necessary for- a person to reach the money. However, the manager also kept the combination in an envelope in a separate “manager’s vault” and Whitlock and the other two officers did “know about the combination being in the manager’s vault.” (Tr. 19). They were entrusted with such knowledge as part of their special duties. In the manager’s absence “they use the combination.” (Tr. 20). “Any one of the [three] bank officers . . . had access . . . to that piece of paper inside the manager’s vault that had the combination.” (Tr. 21) (emphasis added). Thus, although this plan was designed to place the reserve vault cash under “dual control” (Tr. 18), in practice the plan provided each of the key-bearing officers with single access and control: any one of the three could exercise his or her access to the combination and combine it with use of the key. Under such circumstances the district court was clearly entitled to find that Whitlock was effectively entrusted with the combination to the safe as well with the keys.
It therefore appears that, by virtue of Whitlock’s position of trust as Assistant Cashier and Assistant Manager, and the special access she was given to the key and the combination, the funds in the vault were under her effective control. Upon such undisputed facts it must be concluded that Whitlock was one of the “person[s] to whom such [money] ha[d] been intrusted ...” and she committed an embezzlement in converting it to her own use. This conclusion follows from the meaning of embezzlement current at least since the decision in Moore and is enforced by the amended present language of the statute, which precisely, if redundantly, covers the situation of a bank “officer . . . [or] employee [who] . . . embezzles . . . moneys . . . intrusted ... to the custody or care of such . . . officer [or] . . . employee.” (Emphasis added). For the foregoing reasons it is my opinion that Whitlock was guilty not only of the included offense of willful misapplication but also of embezzlement. Judge •Robb joins in this opinion affirming the conviction of embezzlement.

. United States v. Northway, 120 U.S. 327, 7 S.Ct. 580, 30 L.Ed. 664 (1887); Claassen v. United States, 142 U.S. 140, 12 S.Ct. 169, 35 L.Ed. 966 (1891). See 16 S.Ct. at 295.

. “If . . . the indictment . . . had charge'd that the defendant, being ... employe in . .. the United States post office ..., embezzled the sum stated, and had further alleged that such sum came into his possession in that capacity, we should have held the indictment sufficient. ...” 16 S.Ct. at 297.

. The emergence of Moore’s trust concept into an express provision of the present bank embezzlement statute was a gradual process. In the beginning the embezzlement proscription of R.S. 5209 extended only to the officers, employees and agents of national banking associations and to the moneys, funds or credits of the association. The Act of September 26, 1918 amended R.S. 5209 expressly to prohibit any “receiver of a national banking association” from embezzling “moneys, funds or assets of his trust." And embezzling “moneys, funds, or securities intrusted to his care” was proscribed for any agent or employee of the Federal reserve. 40 Stat. 972-73 (emphasis added). Moore’s trust concept was expressly made applicable to employees of national banks by the Act of June 25, 1948, c. 645, 62 Stat. 683. The 1948 Act revised, codified and enacted into positive law those statutes designated as Title 18, United States Code, and entitled “Crimes and Criminal Procedure.” In that 1948 codification § 656 attained its present form.

. Leonard v. State, 249 Ind. 361, 232 N.E.2d 882 (1968), involved an attorney who misappropriated his client’s money by putting his own name in the payee blank on a check signed by the client. The court held “access in a situation of confidence and trust [coupled] with an unlawful conversion of the goods by the entrusted party will sustain a conviction of embezzlement.” Id. 232 N.E.2d at 885. The underlying statute provided: “Every . . . attorney [who,] having access to control or possession of any money [of his employer] shall, while in such employment, [appropriate it to his own use] . . . shall be deemed guilty of embezzlement.” To the same effect is Young v. State, 204 Ind. 331, 183 N.E. 100 (1932).

. Estoppel theory, like the notion of constructive possession, is a familiar way to satisfy the requirement of actual prior possession for embezzlement. See Drake v. State, 53 Ariz. 93, 85 P.2d 984, 987 (1939), where defendant was held estopped to deny his prior lawful possession of property he had acquired under color of authority.