Case: ROYAL BARRY SHAW v. THE UNITED STATES
Abbreviation: Shaw v. United States
Decision Date: 1966-03-18
Docket Number: No. 489-54
Citation: 174 Ct. Cl. 899
Volume: 174
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: ROYAL BARRY SHAW v. THE UNITED STATES
Judges: Before Cowekt, Chief Judge, LarasioRE, Dubfee, Davis, and ColliNS, Judges.
Pages: 899–936

Head Matter:
(357 F. 2d 949)
ROYAL BARRY SHAW v. THE UNITED STATES
[No. 489-54.
Decided March 18, 1966.
Defendant’s motion for reconsideration denied July 15,1966]
Robert H. Reiter, attorney of record, for plaintiff. Spaulding, Reiter & Rose, of counsel.
John R. Franklin, with, whom was Assistant Attorney General Johm, W. Douglas, for defendant.
Before Cowekt, Chief Judge, LarasioRE, Dubfee, Davis, and ColliNS, Judges.

Opinion:
Davis, Judge,
delivered tbe opinion of the court:
A former naval disbursing officer, Lieutenant (j. g.) Boyal Barry Shaw, brings this action to recover back pay and allowances under 28 U.S.C. § 1491 on the ground of wrongful dismissal, as well as to obtain "relief from responsibility for [the] loss" of Government funds under the special provisions of 28 U.S.C. § 1496 and 2512. Before his dismissal, Lieutenant Shaw was in the Supply Corps, United States Naval Beserve, serving on active duty at the Naval Air Station, Willow Grove, Pennsylvania. On October 4, 1948, he was to be relieved as the disbursing officer by another naval officer. Prior to effecting this changeover, plaintiff discovered that his cash account was not in order, and that he was apparently short $5,614.01. This shortage was immediately brought to the attention of the Air Station's Commanding Officer who suspended Lieut. Shaw, according to Navy regulations. An informal auditing board and, later, a formal inspection board investigated the deficiency and reaffirmed the earlier findings. Throughout this period of discovery and investigation, plaintiff acknowledged the existence of the apparent shortage, but often expressed his inability to understand how it might have developed.
On November 20,1948, the Navy lodged four court-martial charges against him: — for "embezzling money of the United States intended for the naval service thereof"; "neglect of duty"; "culpable inefficiency in the performance of duty"; and "violation of a lawful regulation issued by the Secretary of the Navy." On December 2nd, a General Court-Martial was convened. After a 21-day trial the court-martial found Lieut. Shaw guilty on all charges, and sentenced him to be dismissed from the naval service, and to be imprisoned at hard labor for three years. A series of appeals and reviews followed.. On February 3, 1949, the convening authority approved the proceedings, findings, and sentence, with immaterial exceptions. The Navy Judge Advocate General recommended, in September 1949, that the convening authority's findings and actions on the several specifications of the second, third, and fourth charges be set aside, and that Shaw's embezzlement conviction (the first charge) be approved. The Under Secretary of the Navy accepted this recommendation, affirming plaintiff's embezzlement conviction and the dismissal. Lieut. Shaw was dismissed on February 8,1950. Attempts to have the conviction and dismissal reviewed by the Court of Military Appeals were unavailing.
Plaintiff urges a number of constitutional grounds for holding his conviction void. The Government denies any invalidity in the military proceedings, and also asserts that this court should not reweigh and reassess the evidence or inquire into possible errors of law in the court-martial. Stated broadly, the two questions before us are (1) whether we can look into any of the challenges to the court-martial conviction, and (2) whether, if such an examination is warranted, we can find adequate ground for holding that plaintiff's dismissal from the service, as a result of his conviction, w.as void.
I
Although our jurisdiction to reexamine court-martial decisions has not been defined broadly, that it exists is beyond question. Almost two decades ago, we unequivocally declared that a court-martial's denial of a plaintiff's fundamental constitutional rights operated to deprive it of jurisdiction and vested us with the power to grant relief by way of a money judgment if the serviceman had been removed from the service by the sentence of the court-martial. Shapiro v. United States, 107 Ct. Cl. 650, 69 F. Supp. 205 (1947) . A conviction was held no bar to recovery "if the verdict of the court martial was absolutely void and, therefore, forms no foundation for plaintiff's dismissal." Id. at 654, 69 F. Supp. at 207. Some years later, Burns v. Wilson, 346 U.S. 137 (1953), held that civil courts could "determine whether the military have given fair consideration" to claims of fundamental unfairness, but that they could not "reexamine and reweigh each item of evidence ." Id. at 144. A maj ority of the Supreme Court agreed that the scope of collateral review by habeas corpus went beyond limited traditional notions of "jurisdiction". Id. at 142, 148, 154. We have never held that the scope of our "review" by way of a proceeding for a money judgment was any more restrictive. On the contrary, our opinions have consistently stated or assumed that denial of significant constitutional rights would render the military conviction invalid, and permit this court to award back-pay. Other courts have also been willing to look beneath final court-martial convictions (and dismissals) to search for fundamental unfairness, and to order corrective action when the service has refused to do so. A recent example is Ashe v. McNamara, 355 F. 2d 277 (C.A. 1, 1965).
To be sure, where the plaintiff was "accorded a full and fair bearing" (emphasis supplied) within the military system, we have said, following Burns v. Wilson, that we would refuse to cover the same ground by reconsidering the plaintiff's objections anew. Begalke v. United States, supra, 148 Ct. Cl. at 401, 403, 286 F. 2d at 608-10. In that case the constitutional issues (involving alleged illegal searches and seizures, police interrogation, criticism of the accused's counsel during the trial, and claimed interference with the right to appeal) all turned on an evaluation of the particular facts; this court was unwilling to reassess those circumstances for itself, once the military had done so with care. Whether or not this rule of deference to the military findings has been modified or refined by Townsend v. Sain, 372 U.S. 293 (1963) and Sanders v. United States, 373 U.S. 1 (1963), we think that such abstinence is not to be practiced where the serviceman presents pure issues of constitutional law, unentangled with an appraisal of a special set of facts. That type of unmixed legal question this court has always decided for itself. See the cases cited in fn. 4, supra. The problem we consider in Part II, infra, is of this order. We must face the claim that, on the Navy's own factual findings, plaintiff could not constitutionally be held to have committed any crime.
Furthermore, our reluctance to consider Begalke's contentions de novo was prompted, in part, by the fact that he had had the opportunity to bring his conviction to the Court of Military Appeals whose action was by statute "final and conclusive". Id. at 399, 403, 286 F. 2d at 607-08. See, also Moses v. United States, 137 Ct. Cl. 374, 379-80 (1957); Narum v. United States, supra, 151 Ct. Cl. at 330, 287 F. 2d at 907 (1960) (dissenting opinion). In other cases, the right to review here has been clouded by doubt as to whether the plaintiff had timely raised his constitutional claims before the military tribunals (Narum v. United States, supra, 151 Ct. Cl. at 319-22, 287 F. 2d at 901-03 (1960)), or Lad objected to the alleged unconstitutional treatment he received. Fly v. United States, supra, 120 Ct. Cl. at 498, 100 F. Supp. at 442 (1951); Krivoski v. United States, supra, 136 Ct. Cl. at 455, 458, 145 F. Supp. at 241, 243 (1956). These considerations play no part in Lieut. Shaw's case, since the Court of Military Appeals ruled it lacked jurisdiction of his appeal (see fn. 2), and he has vigorously asserted his constitutional rights throughout.
II
At the end of the successive reviews within the military hierarchy, the only surviving charge against plaintiff was the first, "embezzling money of the United States intended for the naval service thereof." All the other accusations were quashed. This count of "embezzlement" specified that Lieut. Shaw, while a disbursing officer, did
during the period of April 19, 1948 to October 4, 1948, fail safely to keep all monies received in his possession and under his control in the execution and under color of his office as aforesaid, namely, a sum of public money of about five thousand six hundred fourteen dollars and one cent ($5,614.01), property of the United States intended for the naval service thereof, and did, therein and thereby, then and there embezzle the said sum of money.
Although the charge was sustained, the Navy expressly found (i) (through a formal opinion of the Judge Advocate General) that "the evidence fails to show any neglect or culpable inefficiency on the part of the accused, but on the contrary contains considerable testimony of prosecution and defense witnesses indicating that the accused exercised due caution and care in his handling of public money in his custody", and (ii) (through a dispositive memorandum of the Under Secretary) that Shaw's conviction was of "statutory embezzlement, which requires no proof of criminal intent" and that "the record does not disclose evidence to the effect that he converted any of the funds to his own use." The only issue we need reach is whether the Navy could con stitutionally convict the plaintiff of "fail[ing] safely to keep" Navy funds when the Navy itself has affirmatively found that he had no criminal intent to convert, and did not convert, and was not negligent, inefficient, or careless. On the Navy's own findings, we hold that it could not constitutionally make the shortage of money, in. these circumstances, a crime punishable by dismissal from the service.
a. The prosecution of Lieut. Shaw for his alleged failure safely to keep naval funds rested on paragraph 8 of article 14 of the then Articles for the Government of the United States Navy (AGN) (34 U.S.C. § 1200 (1946), as amended, effective until May 31, 1951), and 18 U.S.C. § 650 (1948). Paragraph 8 enables courts-martial to punish "any person in the naval service" "who steals, embezzles, knowingly and willfully misappropriates, applies to his own use or benefit, or wrongfully and knowingly sells or disposes of" Government money or property "furnished or intended for the military or naval service " (emphasis supplied). Since "embezzles" is employed in this article without definition, the Navy's practice, when charging offenses under it, has been to define the term by reference to the statutes of the United States. In this case, resort was had to 18 U.S.C. § 650 which establishes as "embezzlement" the act of "any public depositary [who] fails to keep safely all moneys" of the United States deposited with him by certain named persons "or other person having money of the United States Section 649(b) of 18 U.S.C. makes § 650 applicable "to all persons charged with the disbursement of the public money and in the Navy's view it was open to it to turn to the latter for a definition of "embezzles" in paragraph 8. The Navy has long extended § 650's coverage to disbursing officers like Lieut. Shaw in this way, and we do not quarrel, at this point in history, with that practice (although there is some question whether paragraph 8 was not originally designed to cover only actual fraud or actual conversion) .
It is very clear that, in applying § 650 to Shaw, the Navy's position was (1) that the statute initially required the prosecution to prove only a shortage in Shaw's funds; (2) that Shaw then had the burden of explaining that loss by showing that it was caused by someone or something else, without any fault or negligence on Shaw's part; and (3) that proof of fraudulent intent was, in any event, not a prerequisite to conviction. The claimed irrelevance of actual fraudulent intent is demonstrated not only by the Navy's past practice but also by reiterated comment in this very case. The Under Secretary (approving plaintiff's conviction) wrote that "Shaw now stands convicted of statutory embezzlement, which requires no proof of criminal intent, and the record does not disclose evidence to the effect that he converted any of the fimds to his own use." .When plaintiff's counsel appealed, a Navy review officer replied (to the argument of lack of proof-of fraud or willfulness) that the actions of one failing to keep safely public money "are made penal by 18 U.S.C. 650 (1948) , and are denominated embezzlement without regard to [their] being done fraudulently." The other two elements of the Navy's conception of the crime — the prosecution need show only a shortage; the burden of proof then shifts to the accused who can escape only by proving that the loss was wholly attributable to another individual or circumstance — are equally plain. At the court-martial trial, the Judge Advocate, summarizing his case, insisted that, when the prosecution establishes an "unexplained shortage", "the disbursing officer is -prima facie gwilty and, must show what has become of the missing funds", quoting the Naval Digest at 206 (1916). The details of this rule were spelled out in the Digest: — after proof of a shortage, "the accused in order to rebut the prosecution's evidence that the money is missing, which is prima facie evidence of embezzlement, must show not only that the funds were stolen or misappropriated by another, hut, furthermore, must affirmatively show that such theft or misappropriation by another was not due to fault on the part of himself, the accused." Naval Digest 209 (1916). (See also the Digest's comments on 18 U.S.C. § 3487, discussed infra, in subpart II, C, of this opinion.)
It is incontestable that the Navy considered Lieut. Shaw's case in just this light. Not only did the trial Judge Advocate urge the Naval Digest rule on the court-martial, supra, but naval personnel analyzing plaintiff's trial at various levels of review also relied, expressly, on this rule to support the legality of the conviction. For example, in rebutting plaintiff's post-trial contention that the Navy had not carried its burden, a JAG officer concluded that "once the shortage has been established as it was in the instant case, conversion is presumed, a prima facie case has been made out, and'the burden shifts to the accused to account for or explain the shortage." Similarly, when plaintiff appealed to the Secretary of Navy, thé official response was that the specification under the charge of "embezzlement" did "not allege a con version of the money but states as the gravamen of the offense, that the accused did 'fail safely to keep all monies received in his possession and control in the execution and under the color of his office' . There was ample evidence to show the shortage of money alleged and, in fact, the accused prior to trial admitted such shortage."
The Navy went beyond a mere shifting of the burden of justification to the accused. It did not consider that affirmative proof by Shaw that he was free from negligence or carelessness could absolve him. As we have pointed out, the service acknowledged that "there is no evidence in the record which would support a finding that the accused was negligent or culpably inefficient in the handling of public monies in his custody, or that he had converted any of the funds to his own use. The appellate authorities within the Navy agreed, too, that there was affirmative proof supported by "considerable testimony of prosecution and defense witnesses indicating that the accused exercised due caution and care in his handling of public money in his custody." We think it indisputable that the evidence demonstrated, to the Navy's own satisfaction, that the cash deficit was not attributable to any default by Shaw; in fact, this lack of proof warranted dismissal of charges against him of "Neglect of Duty" and "Culpable Inefficiency in the Performance of Duty". Nevertheless, he was convicted of a greater offense — embezzlement — since he was unable to undercut the presumption of guilt by Showing affirmatively "that the [absent] funds were stolen or misappropriated by another", or lost through other proved circumstances, as the Naval Digest, swpra, required.
b. In judging the constitutional validity of such a conviction, we assume that the standards for proving guilt under 18 TJ.S.C. § 650 are less exacting than those generally applicable in cases of conventional embezzlement. Normally, proof of embezzlement requires a showing of fraudulent intent. Cf. Morissette v. United States, 342 U.S. 246, 263-13 (1952). The crime is closely akin to larceny, the chief difference being that in larceny the taking follows an unlawful trespass, while embezzled property is, at the outset, in the lawful possession of tbe wrongdoer. See Moore v. United States, 160 U.S. 268, 269-70 (1895); Hall, Theft, Law and Society 6-10 (1935). Section 650 and its predecessors, however, have been read to eliminate the need for proof of true fraudulent intent. Originally, the provision was part of "An Act to provide for the better Organization of the Treasury, and for the Collection, Safe-Keeping, Transfer, and Disbursement of the public Revenue." Sec. 16, 9 Stat. 59, 63 (1846). Its manifest purpose was to promote care and to require a higher level of conduct in a particular class of federal officers — those "charged with the safe-keeping, transfer, and disbursement, of the public moneys 9 Stat. 63. See 28 Ops. Att'y Gen. 286, 297 (1910). The 1846 statute's proscription against various defaults by Government officers was specifically extended eleven years later when Congress decreed that "public depositaries shall safely keep all moneys deposited" with them; the "failure so to do" was made "embezzlement". Sec. 2,11 Stat. 249 (1857). At other times, related sections were enacted which singled out and defined specific defaults by disbursing officers to be characterized as embezzlement. The "safely keep" provision adopted in 1857 was reenacted several times, until it appeared in 1948 as § 650. A central purpose of these legislative efforts seems to have been to alter the standards for proving "embezzlement" by those responsible for public money. We assume, therefore, that proof that plaintiff negligently lost the cash, or negligently allowed it to be lost or taken, would have been sufficient.
c. We come now to consider whether the Navy applied a fair and reasonable rule of prima facie proof or of presumption in convicting plaintiff. Could the Navy justifiably conclude that Shaw had carelessly failed to "keep safely" the naval funds entrusted to him unless he affirmatively explained the loss or proved that it was due to another's misappropriation or fault ?
The Navy's answer seems to draw its support from two principal roots. One is 18 U.S.C. § 8487 (1948), 62 Stat. 833, providing that "the refusal of any person charged with the • disbursement of the public money to transfer or disburse any such money, promptly, upon the legal requirement of any authorized officer, shall be deemed, upon the trial of any indictment against such person for embezzlement, prima facie evidence of such embezzlement." Long ago, the Navy interpreted an earlier version of § 3487 as authorizing the use of a prima facie rule in prosecutions under the then formulation of 18 U.S.C. § 650. This •interpretation is unequivocally set forth in the Nmal Digest: "For more than half a century it has been held that the mere failure of a disbursing officer to produce or account for the public moneys in his hands when required to do so constitutes embezzlement, unless such officer is able satisfactorily to explain such failure or to show that the funds which he could not produce were, without fault on his part, lost or stolen." Naval Digest 207 (1916) (emphasis supplied). Whatever its current validity, this interpretation does not sanction plaintiff's conviction since he has proved, in the Navy's own eyes, that he was without fault. Such proof satisfies the requirements of the Naval Digest's comment on § 3487; that rule does not compel the accused, who shows his own lack of fault, to prove affirmatively the actual cause of the loss.
To define the defendant's burden under § 650, the Navy has also drawn on a 1910 opinion of the Attorney General. 28 Ops. Att'y Gen. 286. The situation there was similar to the one before us. An assistant Navy paymaster was charged with embezzlement (in violation of Article 14, AGN, paragraph 8) and culpable negligence. The sole act alleged in the embezzlement specification was that the accused "did fail to safely keep and account for" a sum of money. The court-martial refused to find that the accused "actually appropriated" the missing money, "or that he made any particular disposition of it", but did find that the defendant had been negligent. It thus acquitted the defendant of embezzlement, and found him guilty of "culpable negligence in the performance of duty." In effect two questions were put to the Attorney General: (i) Did the specification allege facts sufficient to constitute the offense of embezzlement, or was it necessary to allege the existence of fraudulent intent? ; (ii) did the findings of the court "render the accused, as a matter of law, guilty of that offense", or was it necessary for the Navy to prove an evil intent?' The answer to the first question was that, if fraudulent "intent or knowledge were necessary, their absence, under the positive provisions of this statute [§ 650's predecessor], would be a matter of defense, and it would not be necessary to specifically declare their presence in the specification." Id. at 292. The response to the second inquiry was lengthier. The Attorney General reviewed the authorities for and against the proposition that proof of fraudulent intent is an element of embezzlement, concluding only that the state of the law was clouded. He decided, however, "that there may be such character of negligence as will take the place of criminal intent", and, since the court-martial found that the defendant had been negligent, his conduct "was equivalent to a criminal intent". Id. at 296,298. The Navy could thus convict him under the then version of § 650.
This opinion, says the Naval Digest, sustains the rule that a defendant can overcome the legal presumption of embezzlement under § 650, raised by proof of a shortage, only by introducing evidence to support findings (a) "that the funds were stolen or misappropriated by another", and (b) "that such theft or misappropriation was not due to fault on the part of" the accused. Naval Digest at 209. This overextends the reach of the Attorney General's opinion which said nothing to suggest that the accused had to prove, in addition to his own freedom from fault, that the loss was in fact due to another's fault or to extraneous circumstances unconnected with the defendant. In the case put, the Navy had already proven negligence. The Attorney General assumed that a fraudulent "intent or knowledge [was] necessary", and held only that proof of negligence was adequate fulfillment of a requirement of criminal intent or mens rea (if that was an element of the crime). The Attorney General did not say or intimate that a defendant who disproved his own negligence would have to go further, to clear himself, and show that another person or event was actually responsible for the loss.
We find, therefore, that the specific authorities on which the rule applied in Lieut. Shaw's case is said to rest furnish no support. On the other hand, there are very good reasons for holding that that rule, as used here, would deprive plaintiff (a criminal accused) of constitutional rights by creating an invalid presumption of wrong-doing.
It goes without saying that the prosecution has the burden in a criminal proceeding of proving guilt beyond a reasonable doubt. See Speiser v. Randall, 357 U.S. 513, 523-24 (1958). Evidentiary rules creating presumptions (i.e., prima facie rules) to assist the prosecution in meeting that burden cannot be sustained where there is "no rational connection between the fact proved and the ultimate fact presumed, if the inference of the one from proof of the other is arbitrary because of lack of connection between the two in common experience." Tot v. United States, 319 U.S. 463, 467-68 (1943). Incriminating presumptions are not ordinarily to be constructed, except by legislation. Morissette v. United States, supra, 342 U.S. at 275. But even when done by legislation the extent to which the prosecution's burden may be shifted to the defendant is limited by the Due Process Clause of the Constitution. Tot v. United States, supra, 319 U.S. at 466-67; United States v. Romano, 382 U.S. 136 (1965).
Measured by these standards, the Navy's rule requiring defendants charged with "embezzlement" under § 650 to prove both their own lack of fault and another's culpability (or some other explanation of the loss) goes too far. The "ultimate fact presumed" is that the accused was guilty of negligence or fault. Even though he has adequately proved, by specific evidence, that he was not negligent or at fault, the Navy would still infer that fact from his failure to go further and prove that another person was responsible or that there was some other explanation (such as fire). In the face of an accused's affirmative showing of good character, due caution and care in handling funds (see fdg. 13(c), 14(a)), this additional demand cannot be justified in the circumstances present here. "Common experience" tells us that there will be enough occasions when a custodian or depositary who has exercised the greatest of care will be unable to explain a shortage, or definitively to pin it on another. Sometimes such a showing may be impossible or beyond human compass often it will be extremely difficult. It is unreasonable to vitiate satisfactory affirmative proof of due care simply because the accused has not been able to perform the impossible or the overly difficult. To insist, in this situation, on basing the conviction on the prosecution's mere proof of a shortage shown primarily by office records kept over a six-months period creates an "inference [of guilt beyond a reasonable doubt] so strained as not to have a reasonable relation to the circumstances of life as we know them Tot v. United States, supra, at 468. See Manley v. Georgia, 279 U.S. 1, 5-7 (1929).
The "comparative convenience of producing evidence" (Tot v. United States, supra, 319 U.S. at 467) will not warrant imposition on the defendant, at his peril, of the task of satisfactorily explaining the loss. Convenience, fairness, and perhaps necessity, sanctioned the casting on Lieut. Shaw of the burden of producing evidence of his own due care (and he did so). There is, however, a critical distinction between requiring a defendant, on the one hand, to come forward with evidence where he "has the better means of information", the "more convenient access to the proof, and where requiring him to go forward with proof will not subject him to unfairness or hardship" (Tot v. United States, supra, 319 U.S. at 469-70), and forcing him, on the other hand, to prove the actions of third parties, known and unknown, or to show the effects of outside circumstances, known and unknown. Defendants have no special access to knowledge of such facts. Indeed, in Shaw's case, the reallocated burden was weightier still. The Navy charged him with the failure safely to keep public monies "during the period April 19,1948 to October 4, 1948", apparently because it was unable to pinpoint with any greater accuracy the time at which the loss occurred (see fdgs. 5,19). As a result, the accused was given not only the task of determining how the loss occurred; he was also, in effect, asked (as a necessary preliminary) to determine when within a six-months period it occurred. There were, moreover, several other persons who had access to the monies during this time and there was the possibility of undiscovered mistakes in the office records. We think it plain that "in such circumstances the promotion of convenience from the point of view of the prosecution [is] outweighed by the probability of injustice to the accused." Morrison v. California, 291 U.S, 82, 94, 96-97 (1934).
We' must hold, for these reasons, that Congress could not have meant 18 U.S.C. § 650 or 18 U.S.C. § 3487, on "em~ bezzlement", to embody the rule contended for by the Navy, and that it was not constitutionally open to the Navy to read that rule into these sections.
d. Our faith in this conclusion is the stronger because our decision accords with the Court of Military Appeals' view of the proper function of presumptions in embezzlement prosecutions under the Uniform Code of Military Justice. In United States v. Crowell, 9 U.S.C.M.A. 43, 25 C.M.R. 395 (1958), that court set forth an exacting standard of proof in embezzlement cases. The accused (an Army Lieutenant) was entrusted with certain funds and responsible for their disbursement. An audit of the funds revealed a shortage for which the accused was unable to account. There was no direct evidence of a conversion. "The theory of prosecution was based on the inference of larceny [i.e., embezzlement] that may be drawn from a failure to account by one who has assumed the custody of another's property." This theory was set out in the following instruction:
"There is a well-established legal presumption that one who has assumed the stewardship of another's property has embezzled such property if he does not or cannot account for or deliver it at the time an accounting or delivery is required of him. The burden of going forward with the proof of exculpatory circumstances then falls upon the steward, and his explanatory evidence, when balanced against the presumption of guilt arising from his failure or refusal to render a proper accounting of or to deliver the property entrusted to him, creates a controverted issue of fact which is to be determined by you members of the court."
Passing on the validity of this instruction, the 'Court of Military Appeals first stated that the term "presumption" "refers only to justifiable inferences which the members of a court-martial may draw from the facts and accept or reject according to their experience." Id. at 308. It then held the quoted instruction "glaringly defective" and prejudicial, since it clothed a "presumption" with "an aura of unquestioned legal sanctity which is neither deserving nor correct"; it left the accused with the burden of producing an undue amount of evidence; and the phrase "presumption of guilt" "runs counter to the well-known presumption of innocence at 308-09. These observations are applicable with equal force to the rule urged on the court-martial at plaintiff's trial. That rule, which was central to Shaw's conviction, had the proscribed effect of creating a legal presumption of guilt on the evidence introduced at the trial. The general doctrine of the GroweTl case, supra, has been applied where the prosecution's theory was that the "mere proof of an existing shortage in a trust fund", together with the presumption arising from the failure to account, established a "prima facie" case of embezzlement without additional evidence. United States v. Pettiford, supra, 27 C.M.R. 617, 621, 623-24 (1958) (Army Board of Review). See United States v. Sellers, 12 U.S.C.M.A. 262, 30 C.M.R. 262, 269-70 (1961); United States v. Troutt, 8 U.S.C.M.A. 436, 24 C.M.R. 246, 249 (1957) ; see, also, United States v. Powell, 29 C.M.R. 688, 700-05 (1959) (Navy Board of Review). There are, of course, limits circumscribing the rule that the failure to account does not alone constitute embezzlement. Where other factors cast suspicion on the accused, the Court of Military Appeals has approved an instruction that the "failure to account when demand is made or when an accounting is due" will permit an inference of actual conversion. United States v. Keleher, 14 U.S.C.M.A. 125, 33 C.M.R. 337, 343 (1963). The court has also allowed the law officer to instruct that proof of both a deficiency and the alteration of records would permit an inference by the court-martial of an actual, wrongful conversion. United States v. Lyons, 14 U.S.C.M.A. 67, 33 C.M.R. 279 (1963). In such cases, however, the court has been careful to caution that the inference is permissible, not mandatory; that the court-martial must consider it against the backdrop of the whole case; that the court-martial is "wholly unfettered" as to whether such an inference should be drawn; and, in Lyons, that proof of both elements (a deficiency and alteration of tbe records) is essential. Crowell, supra, at 309; Keleher, supra, at 344; Lyons, supra, at 282. No such saving words of caution restricted the effect to be accorded the presumption of embezzlement in Lieut. Shaw's case.
e. We end by noting, briefly, that plaintiff's conviction cannot be upheld on the ground of absolute responsibility for the loss, irrespective of fault. Neither paragraph 8 of Article 14 of the Articles for the Government of the Navy nor 18 U.S.C. § 650 — each of which refers to embezzlement— seeks to establish such a crime-without-fault, and the Navy did not review Shaw's conviction on that basis. We take the proceedings as we find them. Cf. United States v. Romano, supra, 382 U.S. at 143-44 (1965). There is, moreover, the gravest doubt whether Congress could validly make it a crime, punishable by imprisonment and dishonorable dismissal from the service, for a careful and honest custodian of naval funds to have a shortage not preventable by due care. Cf. Morissette v. United States, supra, 342 U.S. at 254-263, 265.
Nor is there any substance to the defendant's contention that, under the "theory that the greater includes the lesser", the Navy's intention to dismiss Lieut. Shaw embraced the intention to release him from active duty under § 5 of the Naval Beserve Act of 1938 ( 52 Stat. 1175-76, as amended, 56 Stat. 739 (1942), 34 U.S.C. § 853c (1946 ed.)), empowering the Secretary of the Navy to "release any member from active duty either in time of war or in time of peace." First, it is apparent that Shaw's dismissal was not predicated on that section, but on his embezzlement conviction. Second, since the expressed ground for the discharge was void, so too is the discharge (and, in defendant's terms, all its lesser included parts), and it cannot be saved by any general but unasserted power resting with the Secretary of the Navy. Cf. Clackum v. United States, 148 Ct. Cl. 404, 410, 296 F. 2d 226, 229 (1960).
Accordingly, plaintiff is entitled to recover back pay and allowances, less appropriate offsets, from the date on which his pay was improperly withheld to the date of judgment. See Motto v. United States, 172 Ct. Cl. 192, 348 F. 2d 523, 525, 527 (1965). The court also finds, under 28 U.S.C. § 1496 and 2512 (see fn. 1, supra), that the loss of $5,614.01 in the funds entrusted to plaintiff (which the Navy apparently set off against his pay) was without his fault or negligence. Judgment is entered to that effect. The amount of recovery will be determined under Rule 47 (c).
BINDINGS OK PACT
The court, having considered the evidence, the report of Trial Commissioner William E. Day, and the briefs and argument of counsel, makes findings of fact as follows:
1. On February 8, 1950, the plaintiff was dismissed from the naval service, under conditions other than honorable, as a result of a general court-martial and review by the convening authority, as well as by the Judge Advocate General and by the Under Secretary of the Navy.
2. The plaintiff sues here to recover pay and allowances allegedly due him as a naval officer, and also by reason of an amendment to the petition, allowed in open court on December 6, 1962, for relief as a disbursing officer from responsibility for loss of Government funds under 28 U.S.C. §1496 and 2512.
3. The parties agreed at the pretrial that the court-martial was properly constituted, that at the commencement of the proceedings it had jurisdiction over the person of the plaintiff and of the offenses charged, and that the sentence imposed was within the proper limits established for such offenses.
4. Prior to bis dismissal from naval service, plaintiff was a naval disbursing officer witli tbe rank of Lieutenant (junior grade), Supply Corps, United States Naval Reserve. Plaintiff served on active duty at tbe United States Naval Air Station, Willow Grove, Pennsylvania during the period from March 31,1948, to October 4,1948.
5. Plaintiff's court-martial was initiated when, on November 20, 1948, be was accused of tbe offenses contained in tbe following charges and specifications:
CHARGE I
EMBEZZLING MONEY OP THE UNITED STATES INTENDED for the Naval Service Thereof
Specification
In that, Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserve 0062355, while serving on active duty as Disbursing Officer at tbe U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money, did, during the period of April 19, 1948 _to October 4, 1948, fail safely to keep all monies received in his possession and under his control in the execution and under color of his office as aforesaid, namely, a sum of public money of about five thousand six hundred fourteen dollars and one cent ($5614.01), property of the United States intended for the naval service thereof, and did, therein and thereby, then and there embezzle the said sum of money.
Charge II
Neglect of Duty
Specification 1
In that. Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserve, 0062355, while serving on active duty as Disbursing Officer at the U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money as one of the duties of his aforesaid office, did, during the period from April 19,1948 to October 4,1948, neglect and fail safely to keep a sum of public money, namely, five thousand six hundred fourteen dollars and one cent ($5614.01), property of the United States intended for the naval service thereof as it was his duty to so do.
Specification 2
In that, Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserve, 0062355, while serving on active duty as Disbursing Officer at the U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money as one of the duties of his aforesaid office, did, on October 1, 1948, neglect and fail to prepare a daily balance sheet (S. and A. Form 379 Revised November 1937), as it was his duty to so do.
Specification 3
In that, Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserve, 0062355, while serving on active duty as Disbursing Officer at the U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money as one of the duties of his aforesaid office, did, prior to having two (2) commissioned officers verify his official cash on September 30, 1948, neglect and fail to request that the Commanding Officer of the U.S. Naval Air Station, Willow Grove, Pennsylvania, so appoint in writing the aforesaid two (2) commissioned officers to verify his official cash on the aforementioned date as it was his duty to so do.
Specification 4
In that. Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserva 0062355, while serving on active duty as Disbursing Officer at the U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money as one of the duties of his aforesaid office, did, during the period July 1,1948 to October 4,1948, neglect and fail to attest, immediately after being made, credit entries on the pay accounts in his custody of naval personnel, as it was his duty to do.
CHARGE III
Culpable INefficieNcy in the PeeeormaNce of Duty
Specification 1
In that, Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserve, 0062355, while serving on active duty as Disbursing Officer at the U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money as one of the duties of his aforesaid office, did, during the period from April 19,1948 to October 4,1948, then and there, fail safely to keep all monies received in his possession and under his control in the execution and under color of his office as aforesaid, as it was his duty to do.
Specification 2
In that, Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserve^ 0062355, while serving on active duty as DisbursingOfficer at the U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money as one of the duties of his aforesaid office, did, during the period July 1,1948 to October 4,1948, fail to attest, immediately after being made, all credit entries on the pay accounts in his custody of naval personnel, as it was his duty to do.
CHARGE IV
ViolatioN or a Lawful Regulation Issued by the Secretary oe the Navy
Specification 1
In that. Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserve, 0062355, while serving on active duty as Disbursing Officer at the U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money as one of the duties of his aforesaid office, did, knowingly, unlawfully and without proper authority fail to attest, immediately upon being made, all credit entries on the pay accounts in his custody of naval personnel.
Specification 2
3h that, Royal Barry Shaw, lieutenant (junior grade), Supply Corps Reserve, U.S. Naval Reserve, 0062355, while serving on active duty as Disbursing Officer at the U.S. Naval Air Station, Willow Grove, Pennsylvania, and while charged with the disbursement of public money as one of the duties of his aforesaid office, did, knowingly, unlawfully, and without proper authority, on October 1, 1948, fail to prepare a daily balance sheet (S. and A. Form 379 Revised November 1937) at the close of business for that day.
6. A general court-martial was convened at Willow Grove, Pennsylvania, on December 2,1948, for the purpose of trying plaintiff. On December 28, 1948, the court-martial, after a 21-day trial, convicted plaintiff on all charges, and sentenced bim to be dismissed from the United States Naval Service and to be imprisoned at hard labor for 3 years.
7. The convening authority approved the proceedings, findings, and sentence, except as to a portion of the findings not here material, on February 3, 1949.
8. The sentence of dismissal was approved by the Under Secretary of the Navy on February 1,1950, but that portion of plaintiff's sentence involving imprisonment was remitted.
9. The conviction, as finally approved, found plaintiff guilty only of Charge I — Embezzling Money of the United States Intended for the Naval Service Thereof, and its specification.
10. After the plaintiff's dismissal from the naval service, the plaintiff on September 26, 1951, petitioned the Judge Advocate General of the Navy for relief; requested that his sentence be vacated; and that he be restored to all rights, privileges and property which had been affected by his sentence.
11. After consideration of the plaintiff's petition for review, the Judge Advocate General of the Navy on April 7, 1952, in a 23-page report, found that no good cause for relief had been shown and denied the petition.
12. Plaintiff petitioned the United States Court of Military Appeals for review of his conviction and dismissal from the Navy, which court on July 10, 1953, dismissed for lack of jurisdiction. The United States Court of Appeals for the District of Columbia, in an opinion dated January 21, 1954, decided it did not have jurisdiction to review decisions of the United States Court of Military Appeals. Shaw v. United States, 209 F. 2d 811. Plaintiff's motion for an enlargement of time to file a petition for certiorari to the United States Supreme Court was denied.
13. (a). On March 2, 1949, in connection with the review of the conviction by the Office of the Judge Advocate General, the accused's counsel forwarded to the Office of the Judge Advocate General a 99 page brief in support of the position of the defense. On March 3 a 6 page supplemental brief was filed. In a "memorandum: to the file", dated June 16,1949 (prepared by Lieut. Cmdr. Craig McKee) the Navy attempted to rebut point by point the arguments of the accused for acquittal. Paragraph 22 of this memorandum is as follows:
"Counsel refers to the testimony of LCDK. Shepardson which indicated that if a deputy disbursing officer (GDK. Ogletree) had made a disbursement and failed to report it, there would be no way that LCDK. Shepard-son at the Central Office would ascertain such fact. Therefore, says counsel, the defense having shown that the shortage could logically have resulted from the negligent acts of another, it is not the burden of the accused to show this to be a fact, but rather it is the prosecution's burden to show that it was only the act of the accused which caused the shortage. Such a contention is an entirely erroneous concept of the law as set forth in Title 18, Sections 649 and 653, U.S. Code, and once the shortage has been established as it was in the instant case, conversion is presumed, a prima facie case has been made out, and the burden shifts to the accused to account for or explain the shortage." (at pp. 8-9)
(b). On April 11,1949, Lieut. Shaw's case was assigned to Lieut. Cmdr. Craig McKee to be reviewed. His "memorandum in the gom [General Court Martial] case op: Koyal Barry Shaw", dated June 3, 1949, contains the following statement under the heading "allpioable [sic] law and discussion" :
"The specification in the instant case, not by inference, but by affirmative allegation, alleges that the accused did received [sic] in his possession and under his control public money in the amount of $5,614.01, which he failed safely to keep and did thereby embezzle, — such failure to safely keep being of itself the embezzlement alleged here, without the necessity of any alleging or showing that the money was converted by the accused to his own use. (Naval Digest 1916, p203, Embezzlement: 3, 6, 11, & 13.)" [at p. 5]
This memorandum also states the following:
"There is no evidence in the record which would support a finding that the accused was negligent or culpably inefficient m the handling of public monies in his custody, other than the inference to be drawn from the fact that a shortage existed. In fact, there was considerable evidence to indicate that accused was cautious, careful and efficient in the handling of public funds, and based on the implications of his admissions to CUE. Ogletree, his embezzlement was a planned affair with no neglect or inefficiency present." [at p. 7]
In concluding, this memorandum "recommended that an opinion be prepared setting aside" certain of the specifications and that the findings on charge I and specification 3 of charge II and the sentence be approved as legal.
(c). In an opinion dated September 9, 1949, the Judge Advocate General of the Navy recommended that the proceedings and the findings on the specifications of charges II, III, and IV, and the action of the convening authority thereon, be set aside. He recommended that the accused be convicted of embezzlement alone. (Charge I). In recommending that the findings on specification 1 of charge II and specification 1 of charge III be set aside, the Judge Advocate General stated in part that:
"In this case, however, where the accused did not object to the specifications on this ground [failure to allege particular acts] and pleaded not guilty, the defect is considered cured if the evidence adduced supplies the omission. The evidence fails to show any neglect or culpable inefficiency on the part of the accused, but on the contrary contains considerable testimony of prosecution and defense witnesses indicating that the accused exercised due caution and care in his handling of public money in his custody. Since the evidence does not supply the omission, there is a failure of proof to support the court's finding of proved [sic] as to these specifications." (at pp. 1-2)
(d). On October 20, 1949, the Chief, Bureau of Supplies and Accounts wrote to the Chief, Naval Personnel, in part, as follows:
"Since the conviction on the charge of technical embezzlement involves no criminal intent and since an examination of the record does not reveal any allegation or evidence that LTJG Sham converted any portion of the funds to bis own me, tbe Bureau of Supplies and Accounts recommends that consideration be given to tbe remission of the sentence insofar as it relates to imprisonment." [Emphasis added.]
At the time of this letter, the Bureau of Supplies and Accounts knew that the Judge Advocate General had recommended that the findings on the charges under the other three specifications against Shaw be set aside.
(e). On October 24 the Chief of Naval Personnel forwarded the proceedings and the findings in Lt. Shaw's court-martial to the Secretary of the Navy, recommending their approval "subject to the remarks and recommendations of the Judge Advocate General." This letter also recommended that the portion of the sentence dealing with imprisonment be remitted "in consideration of the recommendation of the Chief, Bureau of Supplies and Accounts."
14. (a). On Nov. 8, the Under Secretary of the Navy (for the Secretary of the Navy) wrote to the Naval Sentence Review and Clemency Board as follows:
1. From an examination of the subject case it appears that Shaw now stands convicted of statutory embezzlement, which requires no proof of criminal intent, and the record does not disclose evidence to the effect that he converted any of the funds to his own use. Further, up until the time of the present offense he has maintained a good record, and I understand that Shaw's wife is now mentally and physically ill, that his pay has been withheld since February 1949, and that he has been in close confinement since December 1948.
2. In view of these circumstances, I feel that no benefit to the Navy would accrue from the confinement of this officer and therefore request that you prepare an action which will have the effect of remitting the sentence of confinement.
(b). On December 22, 1949, counsel for the accused addressed a letter to the Secretary of the Navy in the nature of an appellate brief. In a "memoRANdum im etle prepared by one R.A. SCHERR, of the Navy, dated January 5, 1950, plaintiff's first contention was summarized, in pertinent part, as follows:
"Counsel states that the specification under Charge I was apparently drawn in-light of Art. 14, A.G.N. Par. 8, and 18 USC 650 (1948), and that therefore:
(1) The specification under charge I is not a proper specification for embezzlement under 14th A.G.N. Par. 8, because mere failure to safely keep money is not embezzlement within the meaning of 14th A.G.N. Par 8:
(a) That this problem is not resolved by 28 Op. Atty. Gen. 2'86, since in that case there was evidence of gross negligence, whereas in the subject case there is no such evidence;" (at p. 1)
Hi * ❖ *
In response to these contentions, the Scherr memorandum stated:
"This specification does not allege a conversion of the money but states, as the gravamen of the offense, that the accused did tail safely to keep all monies received in his possession and control in the execution and under the color of his office as disbursing officer; namely $5614.01. There was ample evidence to show the shortage of money alleged and, in fact, the accused prior to trial admitted such shortage.
The offense was properly pleaded in this case. The acts of a public depositary (a naval disbursing officer) of failing to keep safely all monies deposited with him are made penal by 18 USC 650 (1948) (Criminal Code 1909, sec. 88), and are denominated embezzlement without regard to the act being done fraudulently. Naval Digest, 1916, EMBEZZLEMENT, par. 7 and 11. It is admitted that in the case involved in 28 Op. Atty. Gen. 286 (May 9,1910), there was evidence of negligence on the part of the accused and that the accused was, in the opinion of the Attorney General, guilty of embezzlement under Section 88, Criminal Code, 1909. The Attorney General in that case, however, did not hold, directly or indirectly, that the accused would not have been guilty had there been no showing of negligence. " (at p. 2)
15. The plaintiff testified briefly at the court-martial proceedings on the voir dire as to the voluntariness of statements made by the plaintiff to two prosecution witnesses. The plaintiff was not called and did not testify as a witness in his own behalf in defense of the charges on the merits.
16. No witness was called to testify before the commissioner of this court.
17. Findings 18-25, which follow, are based on the court- martial record, and indicate, among other things, some of the evidentiary foundation for the conclusion of the Judge Advocate General that "the evidence fails to show any neglect or culpable inefficiency on the part of the accused, but on the contrary contains considerable testimony of prosecution and defense witnesses indicating that the accused exercised due caution and care in his handling of public money in his custody."
18. (a). As disbursing officer at Willow Grove Naval Air Station, the plaintiff was accountable for all funds which came under his control. Navy disbursing officers responsible for United States Government funds are required to make a "Memorandum Account Current" for any period (generally monthly) for which they have a balance due to the Government. (28,55 ;22, 9-14;27,44 — 5). An "account current" is a general recapitulation of information contained in the disbursing officer's cash book, pay rolls, check records and other similar data. (154,93-6). When they are completed and submitted, the accounts current are forwarded to the Navy Regional Accounts Office (known until December 1, 1948 as the Navy Central Disbursing Office (22,9; 20,1)). The Regional Office consolidates the daily and monthly accounts of all Navy disbursing officers in its Region and makes consolidated returns to the Navy Bureau of Supplies and Accoimts. (22,5). (The accounts current for Lieut. Shaw, as disbursing officer for the Naval Air Station at Willow Grove, are in evidence as exhibits 1(1)-1(9).)
(b). From the monthly account current, the Regional Office can ascertain the balance due to the United States which the disbursing officer filing the particular account certifies as the correct amount of the balance due. (27,46)'. The sum of the intelligence the Regional Office has concerning the accounts of a particular disbursing officer is based entirely upon information supplied by the disbursing officer. (29,65-70) (see finding 19 (c)).
19. (a). On October 4, 1948, the Navy discovered a shortage in the plaintiff's cash account (as opposed to his check account) in the sum of $5,614.01. In the court-martial proceeding against the plaintiff, the Navy charged that the plaintiff's failure safely to keep these funds occurred in the period April 19, 1948, to October 4, 1948. (See finding 5.)
(b) Lieut. Shaw's account current for March 31, 1948 showed a cash balance of $44,721.15 and a total balance (including money on deposit in a checking account) of $88,-723.74. This balance was brought forward to April 1, 1948. (27,47) His accounts current for the period April 1 to October 4 indicate that he received $1,744,845.41 in cash during that period. Cash disbursements for the same period for which Shaw furnished substantiating vouchers totalled $1,783,952.55. The difference between the total cash on hand ($1,789,566.56) and the total disbursements is the amount of the shortage discovered on October 4. (28,50-4)
(c). As the trial Judge Advocate specifically indicated, the last correct count of United States Government funds in Lieut. Shaw's possession was made on or about April 19,1948. (405, lines 18-22) At that time, a formal, general inspection of the accounts of the disbursing office at Willow Grove was conducted. Minor, ordinary discrepancies in the cash book were discovered then, but were corrected by rechecking the vouchers, recounting the cash, and checking the entries in the cash book. (224-5,39-46) When the party conducting that inspection departed, Lieutenant Shaw's accounts were in balance. (33,101-04 ;239,50-6)
20. (a). At the end of each month, Navy disbursing offices have a workload heavier than usual, since there are month-end reports and summaries to be prepared. (43-4,14-22 ;47,56-60) The work load at Willow Grove was heaviest between April and the end of September due to the conduct of reserve training programs at that station. (63,161-63 ;82,363 ;74, 275-82) From April until the time of Shaw's suspension in October, there were four or five military and two civil service personnel working in the disbursing office at Willow Grove. (80,38-48 ;630,23) This was two below the normal complement. The disbursing officer is responsible for the men in bis office and accountable for their disbursement actions. (79,323-24) The personnel in the disbursing office frequently worked oyertime ha the evenings and on weekends. (316 ;90,441;64,175-78) Lieut. Shaw's staff told him on several occasions of the office's heavy work load and of the need for additional personnel. On numerous occasions, Shaw requested additional help from the personnel office. After his suspension as disbursing officer, two additional military personnel were assigned to the disbursing office, thus bringing the office staff up to its normal complement. (322,14L-50 ;82,361-64)
. (b). In order to operate the disbursing office, Lieut. Shaw had assigned various duties to Benjamin Hessington who was the enlisted man in charge of the office. (48,1-5) Hessing-ton was charged with the supervision of the work load in the office and would see to it that various required reports were sent out when due. (49,18-20) Also, he (or one of the other men) would draw up the daily balance sheets in rough form and convert them to a finished copy for Lieut. Shaw's signature. (50,25-7) The daily balance sheet was prepared from the numerous vouchers and pay receipts which militai-y and civilian personnel presented to the disbursing office in exchange for their pay. (52-3 ) After completion, the daily balance sheet together with the necessary accompaiaying vouchers and receipts was presented to Lieut. Show for his signature. (67-8)
21. (a). Cmdr. Ogletree was the deputy disbursing officer to Lieut. Shaw. (178,170-85 ;324-25,166-79) In the-authorized absence of a disbursing officer, the deputy has the power to disburse funds. In such a case, the deputy would receive funds from the disbursing officer by giving a personal receipt for the amount of the cash received. The disbursing officer has the responsibility to ascertain that the deputy, after completing the transactions undertaken, accounts for the amount of cash received, either by .the return of unexpended cash or by the return of proper documents evidencing expenditures. (39,150-57)
(b). In July 1948, Lieut. Shaw was ill and confined to the dispensary for a weekend. (66,199-202) During that time, 'Cmdr. Ogletree was authorized to sign U.S. Treasury checks. Cmdr. Ogletree improperly signed two incomplete, blank checks. (364-65,64-75) These blank checks were effectively voided by a member of the disbursing office staff. (89,426-32) The cash and checking account balances were kept separately. Tire cash balance could not be affected by any improper disbursements by check. (332-33) There is no evidence of any negligence on the part of Cmdr. Ogletree.
(c). Lieut. Shaw was on authorized leave on Saturday and Sunday, October 2 and 3. (133,9-13) During that weekend, the duly-appointed disbursing officer at Willow Grove was Cmdr. Ogletree. Cmdr. Ogletree did not submit a daily balance sheet for either of those two days, and there is no evidence of any disbursements on those days. (31,82-9). In the absence of transactions, there is no requirement to submit a daily balance sheet.
22. (a). The Navy had determined to remove Lieut. Shaw from his position as disbursing officer before the shortage in question was discovered. (134, 18-19) On or about Sept. 28, 1948, the Commanding Officer of the Naval Air Station delivered orders (dated September 26 or 27) to Commander Robert H. Ogletree directing him to relieve Lieut. Shaw as disbursing officer. (156, 6-9) The Commanding Officer, Comdr. Ogletree and Lieut. Shaw discussed the date this relief should take effect, and they agreed that, due to the fact that officers and civilians were to be paid on Friday October 1, Monday October 4 would be most appropriate.
(b). As a result, Comdr. Ogletree went to the disbursing office at approximately one o'clock on Monday October 4 to relieve Lieut. Shaw. The plaintiff asked him to come in, close the door and have a seat. After greeting each other, Ogletree asked Shaw if he were "set to transfer." Shaw then stated that he was short by about $2,600.00. (159-60,
39-41) Ogle tree' expressed his surprise. Shaw asked Ogle-tree to assist him in recounting the money. Ogletree refused, and told Shaw to recount the money himself and produce an exact figure which could be passed on to higher authorities. Ogletree then went and reported what he had heard to the Commanding Officer who directed him to return and deter mine what the findings were. Shaw voluntarily reported that his cash balance was short by $5,614.01.
(c). During this time, Lieut. Shaw was nervous and dejected because he could not understand the loss. He never admitted that the shortage was attributable to any culpable action or inaction on his part. Shaw and Ogletree later went to the office of the Commanding Office where Shaw reiterated that he could not understand the shortage. (166, 92;275,30) The Commanding Officer thereafter suspended Shaw, and directed Shaw and Ogletree to seal the safe in Shaw's office. In the presence of Shaw, Ogletree did this.
.23. (a). The Commanding Officer then issued orders convening an informal inspection board to count the cash in Shaw's safe. This board, comprised of Cmdr. B. H. Ogle-tree, Lieut. Cmdr. H. H. Huggins and Lieut. J. A. Mirabito, met at approximately 3:30 that afternoon in Lieut. Shaw's office. (161,47) The members of the board individually and collectively counted the cash on hand. The bills in Lieut. Shaw's safe were stripped of their binders and counted manually, bill by bill. (184,23-25) In this manner, the board determined that $48,328.51 was actually on hand. In order to arrive at the figure representing the amount of cash that should have been on hand on October 4th, the board first used the account current for the month of September which stated the cash balance on hand as of September 30, 1948. To this figure, the board added the amount of cash received by Shaw from the local bank in exchange for United States government checks in the period October 1-4. It then subtracted the amount of disbursements in cash made by Shaw in the period October 1-4. The final sum represented the "book figure as far as cash was concerned." (145,52-4) The board found that the "book figure" exceeded the actual cash on hand by $5,614.01. (141-2,19-30 ;153,83-92)
(b). The board then submitted the following report to the Commanding Officer:
"1. As directed in reference (b), inventory of the money in charge of LTJG Boyal Barry Shaw, SCB, USNB, 0062355, Disbursing Officer, Naval Air Station, Willow Grove, Penna., was taken on 4 October 1948.
2.The findings of this inventory are as follows:
CASH ON HAND as of 30 September 1948. (Veri- $24,369.52 fled by Account Current submitted by LTJG Shaw as of 30 September 1948).
RECEIPTS — Exchange for cash check (check 40,000.00 #22641 dated 1 October 1948) cashed by LTJG Shaw and taken up as cash on hand 1 October
1948. -
Total_ $64,369.52
EXPENDITURES — Navy Payroll $10,234.00
#101.
Marine Pay- 193.00
roll #4.
CASH ON HAND AS PER CASH BOOK 10/4/48. $53,942.52
ACTUAL CASH ON HAND AS OP 4 October 1948, as shown on Enclosure (A). 48,328.51
SHORTAGE-_ $5,614. 01
10,427.00
3. It will he noted from the above figures that only two payroll expenditures, totaling $10,427.00, were made between the dates of 30 September 1948 and _4 October 1948. These payrolls and pay receipts were still held, as of 4 October 1948, by LTJG Shaw, and were check [sic] and verified.
4. Only one safekeeping deposit in the amount of $600.00 was held by LTJG Shaw. This safekeeping deposit was verified as correct."
(c). There is no evidence of any negligence in connection with the two payroll expenditures made by Lieut. Shaw between September 30 and October 4,1948. (63,168-71 ;52 — 53) 24. The accuracy of an account current for a particular month as a reflection of the amount of cash actually on hand is dependent on the accuracy of the account current for the preceding month, since the initial cash figure on an account current is the balance carried over from the prior month. (See finding 19(b).) The accuracy of the account current for September 1948 (relied upon by the October 4 inspection board in computing the shortage) therefore depended on the accuracy of the accounts current for the preceding months back to the last general inspection of Lieut. Shaw's accounts. (154,93-99) As noted in finding 19 (c), the last general inspection of the disbursing office accounts at Willow Grove was April 19, 1948. It is not certain that the account current for September 1948, prepared by Lieut. Shaw, accurately reflected the amount of cash which should actually have been on hand then. If there were an error in the September account current, the finding of a shortage of $5,614.01 would in turn be erroneous. (154,98-9 ;281,16). It is possible that with the lapse of time an error in an account current for one of the months preceding September 1948 would have been discovered by the Bureau of Supplies and Accounts. (176, 158-9 ;165,85;)
25. (a). ,A formal inspection board was convened on October 7 and 8, made up of Lieutenant Commander J. L. Miller, Senior Member, Lieut. W. H. Fraser, and Lieut, (j.g.) A. J. Barsanti. This board was to inspect the accounts of Cmdr. Ogletree for the period October 4-7 and those of Lieut. Shaw for the period October 1-4. (97,16-7). During the course of this inspection, Lieut. Shaw stated to Lieut, (j.g.) Barsanti that he was aware that the cash book was not in balance, but that he did not know the reason for the shortage. (274)
(b). Lieut. Shaw cooperated with the members of this inspection board. (227,72) No promises of immunity, or promises which might have been interpreted as guaranteeing immunity, were made to Shaw; nor was he threatened in any way. (223,27-37). There was nothing to indicate that Shaw was laboring under fear of compulsion, or that he admitted the shortage in the hope that he would receive favored treatment. (230,95-110,237). Shaw testified at the court-martial that he felt that he had to answer questions put by the board because he considered it to be part of his duty and because he sensed that he was under a direct obligation through command to do so. (254,41 ;110) In the circumstances, it is possible that a refusal on Shaw's part to cooperate with the board would have subjected him to disciplinary action. (228,80 ;227,76). There is conflicting testimony as to whether Shaw was warned that the admission of a shortage might be used against him in a court-martial proceeding. (239,48 ;262,120).
26. Although the evidence is far from clear, it is indicated that the Navy Department did retain from funds, otherwise due to the plaintiff the sum of $5,614.01, the amount which was found to have been embezzled by the plaintiff. By June 25,1954, no further amount was due to the United States from the plaintiff.
27. On the basis of the court-martial record and proceedings and the record before the court, it is found that tins loss of $5,614.01 was incurred without plaintiff's fault or negligence.
CONCLUSION OP LAW
Upon the foregoing findings of fact which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is entitled to recover and judgment is entered to that effect. The amount of recovery will be determined pursuant to Rule 47 (c) (2). The court also concludes that the loss of $5,614.01 in the funds entrusted to plaintiff was without his fault or negligence and judgment is entered to that effect.
Section 1496 grants this court "jurisdiction to render judgment upon any claim" on behalf of disbursing officers for relief from losses incurred in the line of duty. Section 25X2 is as follows: "Whenever the Court of Claims finds that any loss by a disbursing officer of the united States was without his fault or negligence, it shall render a judgment setting forth the amount thereof, and the General Accounting Office shall allow the officer such amount as a credit in the settlement of his accounts."
Plaintiff petitioned the Judge Advocate General of the Navy for relief under § 12 of the Uniform Code of Military Justice (64 Stat. 147, May 5, 1950). On April 7, 1952, the petition for relief under § 12 was denied, because no "good cause" for relief was shown, as the section required. On July 10, 1953, the Court of Military Appeals granted the Government's motion to dismiss plaintiff's petition for review for lack of jurisdiction. See United States v. Sonnenschein, 1 C.M.R. 64 (1951) (defining the appellate jurisdiction of the Court of Military Appeals over courts-martial pre-dating enactment of the Uniform Code). The Court of Appeals for the District of Columbia Circuit held it lacked jurisdiction to review this dismissal. Shaw v. United States, 209 F. 2d 811 (C.A.D.C., 1954). A motion for enlargement of time to file a petition for certiorari to the Supreme Court was also denied on the ground that the Court of Appeals clearly lacked jurisdiction.
In Shapiro, the court noted that "there was undoubtedly a denial of plaintiff's rights, preserved under the Fifth and Sixth Amendments Id. at 655, 69 F. Supp. at 208.
See Sima v. United States, 119 Ct. Cl. 405, 426, 96 F. Supp. 932, 938 (1951); Fly v. United States, 120 Ct. Cl. 482, 498, 100 F. Supp. 440, 442 (1951); Lucas v. United States, 121 Ct. Cl. 819, 828 (1952); Graham v. United States, 136 Ct. Cl. 324, 327-28 (1956), cert. denied, 353 U.S. 917 (1957); Krivoski v. United States, 136 Ct. Cl. 451, 458-59, 145 F. Supp. 239, 243, 244 (1956), cert. denied, 352 U.S. 954; Griffiths v. United States, 145 Ct. Cl. 669, 672-73, 678, 172 F. Supp. 691, 693 (1959), cert. denied, 361 U.S. 865; Begalke v. United States, 148 Ct. Cl. 397, 402, 286 F. 2d 606, 609 (1960), cert. denied, 364 U.S. 865; Narum v. United States, 151 Ct. Cl. 312, 315-16, 319, 287 F. 2d 897, 898-99 (1960), cert. denied, 368 U.S. 848 (1961).
In Ashe, a former steward in the Navy, who had been dishonorably discharged pursuant to a court-martial conviction, brought an action "in the nature of mandamus" (under 28 U.S.C. § 1361 (1964), 76 Stat. 744 (1962)) against the Secretary of Defense to have his discharge changed from dishonorable to honorable. It appeared that plaintiff's "conviction was the product of court-martial procedure fundamentally unfair" — he was denied effective counsel. The First Circuit held that the plaintiff could compel "the Secretary of a military department" (within 10 U.S.C. § 1552 (1964), 70A Stat. 116 (1956)) to exercise his administrative power to set aside a dishonorable discharge where "constitutional rights of the accused were violated in the military trial which eventuated in the long since final sentence ordering such [dishonorable] discharge." 355 F. 2d at 280.
10 U.S.C. § 876 (1964) (Article 76, uniform Code of Military Justice), 70A Stat. 64 (1956).
In Begalke, "an appeal to the Court of Military Appeals was dismissed for failure to prosecute." 148 Ct. Cl. at 403, 286 F. 2d at 610. See fn. 2, supra.
We stress that we do not reevaluate the Navy's assessment of the evidence at the court-martial, but accept that assessment as authoritatively made by the Judge Advocate General and the Under Secretary.
See Naval Courts and Boards § 89 (1937) ; Naval Digest 204 (1916).
Various paragraphs of article 14 typically applied to acts done by persons "knowing" them to be "false or fraudulent" (1) ; "knowing" them to be "forged or counterfeited" (5) ; and "with intent to defraud the united States" (7). The final substantive paragraph of the article provided for punishment of anyone "Who executes, attempts, or countenances any other fraud against the united States" (emphasis supplied). Moreover, article 14 was derived from 12 Stat. 696-97 (1863), enacted during the Civil War to "prevent and punish Frauds upon the Government of the United States", applicable to "any person in the land or naval force's of the United States". See Snedeker, Military Justice Under the Uniform Code p. 733 (1963). That portion of the 1863 statute corresponding with paragraph 8 of article 14 was carried forward into 18 U.S.C. (1949 ed.) § 87 (in terms almost identical with those of paragraph 8). This provision is now incorporated in 18 U.S.C. §641 (1964). See Morissette v. United States, 342 U.S. 246, 265-69, & n. 28 (1952). Were the Navy's long-standing interpretation not to the contrary, it could be said that the reach of that section (§ 641) and of paragraph 8 would be co-extensive. In Morissette, supra, the government did not contend that embezzlement, as defined in § 641, required no proof of fraudulent intent, 342 U.S. at 263-64, and the Supreme Court's reasoning seems to indicate that proof of all the crimes in § 641 does require such intent.
Emphasis supplied. The Naval Digest (1916) "is a reference book containing digests of decisions and opinions, and Information in connection with them." It is "published primarily for the future convenience of the [Navy]! department itself, which is thus afforded a reference to the authorities for use in cases involving similar points without having to go over ground which has been fully covered." Naval Digest at 3. Its provisions relating to embezzlement were relied upon by the Navy throughout its consideration of Lieut. Shaw's case, and it is proper to consider them in passing on the conviction.
Lieut. Shaw's court-martial counsel vigorously argued in his summary to the court that the defendant's evidence was sufficient to overcome any prima facie case which the prosecution may have made out. The fact that both summaries at the'trial focussed almost wholly on the presumption stated in the Naval Digest points up its central importance In Shaw's conviction.
An independent examination of the court-martial record reveals no proof of negligence and much proof that plaintiff was careful.
Por example, the Act of 1846 made criminal the unauthorized investment, loaning, or depositing in a bank of government funds. 9 Stat. 63. The same legislative pattern continued into this century. The Criminal Code of 1909 (secs. 87-92) brought earlier enactments up to date, and defined a series of specific acts which would constitute embezzlement. -35 Stat. 1088, 1105 (1909). These were carried forward in 18 U.S.C. (1940 ed.) as sections 173-78, now 18 U.S.C. (1964) sections 643, 648, 649, 650, and 653. This Congressional approach to the problem of misappropriation of public funds is not unique; state legislation, too, has generally tended to enumerate specific prohibited acts, thus eliminating the need for proof of a special intent. See Note, Criminal Breaches of Trust — A Statutory Survey, 39 Col. L. Rev. 1004, 1008, 1013 — 16 (1939).
The Navy's position was that proof of an unexplained shortage required a finding of guilty, and did not merely authorize or permit such a finding. The Naval Digest (quoting an early Army Judge Advocate General's opinion) states: if the accused fails to explain his nonproduction of the public money, "the court is warrranted in finding, and indeed must find, him guilty of the charge." Id. at 207. Also, "a pay officer when a shortage is proved is guilty of embezzlement, even though the funds were taken by another, unless he is free from neglect, and for an acquittal evidence showing absence of such neglect isi necessary, Id. at 212. [Emphasis supplied.]
The Navy seems to have applied such a rule regularly in statutory embezzlement eases at the time of plaintiff's conviction. See Navy C.M.O. 7-1949, pp. 155-57 (1949).
"In United States v. Pettiford, 27 C.M.R. 617, 622 (1958), the Army Board of Review rejected the Contention that 18 U.S.C. § 3487 authorized a presumption of embezzlement from the proof of an existing shortage and the inability to account therefor. Whether or not these rules may have merit in the civil law (by encouraging a high standard of care), the Board noted, "we are convinced that these doctrines now.[under the uniform Code of Military Justice] have no place in our military law of larceny." See subpart D of Part II, infra.
18 U.S.C. § 3487 (1964) was formerly 18 U.S.C. § 180 (1940), and was derived from 35 Stat. 1106 (1909), formerly Rev. Stat. § 5495, originally 9 Stat. 63 (1846). .
The Attorney General's opinion is the principal extra-military basis of the Navy rule. United States v. Hunt, 26 Fed. Cas. 432 (1841), which the Naval Digest cites as an "example" of a case where the burden of proof de: volves upon the accused to show his innocence beyond a reasonable doubt, is entirely different, since there was clear and convincing evidence ("prima facie") establishing the offense, and Judge Story merely instructed that the burden, in those circumstances, was on the defendant to support his claim of "justifiable self-defence." Id at 434-35.
The "prima facie" rule here involved creates a "presumption". In the present context, the terms are interchangeable. See Casey v. United States, 276 U.S. 413, 418 (1928); Tot v. United States, 319 U.S. 463, 472 (1943); United States v. Gainey, 380 U.S. 63, 78-9 (1965) (Black, J., dissenting). Compare Bailey v. Alabama, 219 U.S. 219, 234 (1911) with Naval Courts and Boards § 76 at 56 (1937).
Especially when a longish period is involved, several other persons have had access to the money or property, or complex records must be kept.
The offenses covered by Article 14 of the Articles for the Government of the Navy were treated in the uniform Code of Military Justice, as enacted in 1950, at 64 Stat. 138, 140, and 142. They originally appeared in 50 U.S.C. § 702, 715, and 726, and now appear in 10 U.S.C. § 908, 921, and 932 (1964), 70A Stat. 71, 73, and 75 (1956). Charges of embezzlement formerly treated under AGN 14, para. 8, are now generally prosecuted under § 921, "Larceny and wrongful appropriation". Section 921 requires an intent to deprive or defraud, and § 908 ("Military property of United States — Loss, damage, destruction, or wrongful disposition") applies to willful or neglectful defaults.
In opinions involving a different problem, though related to ours, the Court of Military Appeals has emphasized that the defendant's exculpatory evidence must be considered, and has reversed convictions where the findings (though clearly supported by the Government's evidence alone) did not take all the evidence into account. See, e.g., United States v. Peterson, 15 U.S.C.M.A. 199, 35 C.M.R. 171 (1964) (larceny).
See 28 Ops. Att'y Gen., supra, at 297: " If money should be lost by robbery, or fire, or by any accidental means, after every precaution had been exercised by the official having it in his possession, it would indeed be a harsh rule that would not only hold him and his sureties liable for the same, but would confine him in the penitentiary for its loss;
Defendant has not proved, or offered to prove, that, if plaintiff had been freed of the court-martial charge (as he should have been), the Navy would nevertheless have separated him, or returned him to inactive status, under § 5 of the Naval Reserve Act or some other applicable provision. We have no reason to believe that he would have been so separated. See Egan v. United States, 141 Ct. Cl. 1, 158 F. Supp. 377 (1958); cf. Merriott v. United States 163 Ct. Cl. 261, 264-65 (1963), cert. denied,, 379 U.S. 838 (1964).
T]je reference to section 653 was an inadvertent .mistaken substitution for section 650 which was the basis of Charge I against plaintiff.
If the reference to "a planned affair" was intended to suggest deliberate conversion or wilfulness on the part of Lieut. Shaw, there is no evidence in the court-martial record to support it. See findings 18-23, infra, especially 22(b). .
The parenthetical numerical references in the ' following findings refer to (i) the page (or pages) of the court-martial transcript and (ii) the question (or questions) thereon which support the particular finding. Thus, "(27,44^-5)" refers to transcript page 27, questions 44 and 45. There may also be additional support elsewhere in the transcript.