Shong v. Stinchfield , 47 N.D. 495 ( 1921 )

On Petition for Rehearing, Filed June 6, 1921.

Bronson, J.

Two juries through their verdicts have held respectively ; the first jury, that the plaintiff was not guilty of the crime of embezzlement, and, the second jury, that there existed no probable cause to warrant belief of the embezzlement of either money or property. This appeal is before this court for a review of errors alleged to have been committed upon the trial of the civil action. Our chief justice has presented a dissenting opinion upon the determination made by this court and a further dissenting opinion upon the petition for rehearing. The appellants have filed an extended petition and supplemental petition for rehearing. From these dissenting opinions and the petitions one might well infer that this cause is presented to this court both upon the law and the fact as a trial de novo. This court, sitting m review the errors specified, must review the error specified upon the record. It is not dhe function of this court, in this appeal, as apparently appears in the dissenting opinion of our chief justice, to adjudge guilty, both the state’s attorney of failure to properly perform his duty, and the plaintiff of the crime of embezzlement. Not thus may one so be condemned and convicted. The right of trial by jury still remains in the state.

The state’s attorney in the criminal action, who is one of the attorneys for the defendant has an honorable record before the courts of this state as a lawyer. The jury, by a verdict, have found that there was not a full disclosure of the facts made by the complaining party to this state’s attorney. The record amply warrants this holding.

Our chief justice asserts that the jury made no such finding and that our opinion does not attempt to show wherein the defendant failed to make a full disclosure. A mere inspection of the record answers this assertion. The court charged the jury: “So, that if you believe in this case that the defendant Stinchfield made a full, fair, and honest statement of all the facts in the case as were known to him, or believed by him to exist, and that upon such statement he received advice from the state’s attorney that he had good cause for making complaint against the plaintiff, then, I charge you that the plaintiff cannot recover in this law suit.”

The jury found that the plaintiff could and was entitled to recover. Necessarily, the jury found that the defendant did not make a full and fair disclosure of the facts. This court has heretofore held that one who seeks to rely upon the advice of counsel as a defense must show that he communicated to such counsel all of the facts within his knowledge, and all that he could ascertain with reasonable diligence and inquiry and that he acted on the advice received honestly and in good faith in causing the arrest, and that further, to obtain the protection which the advice ,of counsel affords, it is not enough to prove generally that all the facts were laid before him. The proof must show what facts were communicated, so that it may be seen whether the presentation was full and fair. Merchant v. Pielke, 10 N. D. 48, 53, 84 N. W. 574. Whether there has been a full and fair communication to counsel is a question of fact for the jury. 26 Cyc. 111. The dissenting opinion of the chief justice, of itself, shows that there was neither a full nor fair disclosure of the facts made by the defendant to the state’s attorney. So faulty was it, that the chief justice terms the criminal prosecution a mere ■fiasco. So flimsy was it, that the chief justice states that there was no reason for employing counsel to defend against it. Yet, the fiasco resulting, if such it may be termed, was occasioned through the disclosure of facts as stated by the defendant to the state’s attorney, supposable facts which it then knew or ought to have known. The chief justice states that it was the duty of the state’s attorney to examine into the charges and either to approve or disprove the issuing of the warrant, to refuse to sanction a prosecution without probable cause, and that the presumption of law is that he did his duty. The state’s attorney did issue this warrant. The chief justice avers that the complainant did make a fair, honest statement of the case. Yet he avers that there was no excuse for drafting this information against the plaintiff herein and going to trial without any evidence to show a conversion of money. No showing exists in the record nor does the chief justice assert that the state’s attorney acted upon other or different information than he received from the defendant. The state’s attorney testifies that he acted upon the information furnished by the defendant. The criminal prosecution had, as the chief justice argues, was without probable cause. Manifestly, if the defendant had made a full and honest statement of the facts to the state’s attorney, no prosecution upon the criminal charge of embezzling money would have resulted. For, as the chief justice asserts, the presumption is that the state’s attorney did his duty. Thus does our chief justice blow both hot and cold upon the contentions of a full and fair statement made to counsel. "Wherein did the defendant fail to make a full disclosure of the facts ? A few illustrations will suffice: The chief justice quotes the argument of the state’s attorney (one of the attorney’s for the defendants herein) viz: — “The confessed shortage of $171.57 — the money shortage was determined by deducting from the record of sales made the amount of cash deposited and the accounts outstanding as repprted by the plaintiff. The plaintiff was charged with the total sales, then credited with the cash deposited and the accounts outstanding as reported by him.” At the trial, the state’s attorney testified:

“A. Mr. Stinehfield told me that he wanted to make a criminal complaint against their agent at Kramer, Mr. John Shong, and I asked him what the case was, what it was about; he says, he was short, over there and I asked him how much could be proven or something to that effect, what the evidence was, how he knew he was short and he told me they had the records and reports that he had to make and did make of all his sales; they also had the records of his deposits of cash that he had received and statement of all the outstanding accounts that Mr. Shong. claimed to have and from those statements that he figured he was short in cash something like $170 or $180, I don’t know the exact ¿mount, I believe the exact amount was stated in the criminal complaint. Mr. Stinchfield also said that when he had figured this up with Mr. Shong, Mr. Shong had told him that he was short, made that admission he says; that is the substance of what he told me.”

The state’s attorney further testified, in response to the question whether Stinchfield had a statement showing the amount of the various shortages, that he would not- be certain; that he thought perhaps he did; that the only thing he was interested in was the shortage of money. He further testified that he did not remember Avhelher he (Stinchficld) told him that Shong claimed the company Avas indebted, to him for Avages in the sum of $120. The defendant, Stinchfield, as superintendent of the eleA^ator company, testified that AAdien he signed the criminal complaint he did so ’ under instructions from the elevator company and the bonding company. In response to a question to tell the jury everything that he told Mr. Weeks at that time, he stated that he introduced himself, and told Mr. Weeks that he had a criminal complaint to make; that he Avanted to swear out a complaint against Mr. Shong, and he gave him a statement of the facts that he had; 'that he wanted a Avarrant for this man; that he told Mr. Weeks it was a shortage of $171.57 in cash; that Mr. Shong had embezzled; that Weeks wanted to know if he had the evidence and he told him he had; that he laid it before him, and the state’s attorney, after looking it over, said, there Avas no question but Avhat he had the proper evidence so far as he could seq and he issued the warrant; that he laid all the evidence that he had from the Atlantic Elevator Company before him as to any money shortage; that this evidence was “a statement gotten out showing what he was short and it was the shortage of the difference between, the difference here in his sales accounts and his deposits and nothing to cover the difference;” that this statement showed a shortage of $182.57 and that he wanted a warrant for $182.57; that at that time there was an error of $11 which he had not noticed. (It is here to be noted that this $11 error consists of two accounts, Perry $8, and Schultz $3, which Stinchfield authorized plaintiff to charge off as bad accounts. These two accounts were in the list of eleven accounts which aggregated over $182, and which in amount covered the shortage in money claimed; evidently Stinchfield knew something about these accounts.) He also testified that he told the state’s attorney that Shong admitted that he was short and that he used the money. In this connection the testimony of Stinchfield himself is significant. The chief justice asserts that because plaintiff testified that he did not show the ledger to Stinchfield that thus he was keeping Stinchfield in the dark. Stinchfield, on cross-examination was asked if he made an examination of this small ledger at that time, referring to the time when plaintiff was cheeked out in August, 1918. He answered:

“Not at that time.

Q. “When did you examine it last? A. In April.”

Q. “As a matter of fact that ledger shows at least some of these accounts that he claims existed, does it not ? A. Possibly, but he was not keeping his book up, and it was no authority to me as to whether the accounts were correct or not.”

Q. “You didn’t take the trouble to make an examination of it at all ? A. No, Sir.”

Thus is plaintiff corroborated that he did not take statements from that ledger; that such book was never a full account of the outstanding accounts. Thus is it shown that Stinchfield knew about this ledger; and knew or had the means of the knowledge of its contents, and, further, that Stinchfield did not check up; through this ledger; it was unnecessary; the sales slips and the day book, each spoke for themselves; the sales slips showed either cash or charge sales. The question as to whether Stinchfield made a full, fair and honest disclosure of the facts to the state’s attorney, as a matter of law, upon this record answers itself. It is apparent that Stinchfield went to the state’s attorney for the purpose of getting a criminal warrant for the arrest of the plaintiff for embezzling money. He did not first lay the facts before the state’s attorney. First he stated that he wanted a criminal warrant. He even asserted to the state’s attorney that Shong admitted that he had embezzled and had used money. In accordance wik Skong’s testimony wkick was for tke jury, and wkick testimony apparently they believed, tkis was not true and Skong had not admitted tkat he had embezzled or used tke money, and assuredly upon tkis record it was false to state or assert tkat plaintiff had embezzled tke company’s money. This first was a disclosure found not true. Again he did not disclose to the state’s attorney concerning tke claim of Skong that tke company owed him money. Further, he did not disclose to tke state’s attorney tke facts as disclosed in the record tkat tke sales made were evidenced by sales slips showing tke date, tke party to whom sold, and tke merchandise sold, and tkat these sales slips were sent to tke home office or wore supposed there to be sent. Ho did not disclose to tke company tkat sales which wore made not for cask were shown by these sales tickets, by entries upon tke day book and to some extent by charges entered in tke small ledger. He did not disclose to the state’s attorney concerning customers’ accounts as shown by the sales slips on the day book, and in tke small ledger wherein entries of credit were made by tke plaintiff for accounts tkat he owed suck customers or in explanation concerning suck entries. He apparently did not disclose to tke state’s attorney tke list of tke accounts receivable suck as could have been readily ascertained if he did not already know them from tke day book, the ledger, and tke reports made by tke plaintiff to tke home company. Tke statement concerning wkick Stinckfield testified did not pretend to have any list of accounts receivable. It was a statement prepared or submitted by defendant which showed and claimed a shortage of over $600. Tke shortage with reference to coal, wheat, rye, flax, oats, barley and millet was not a shortage claimed through malefaction, but a shortage or overage, as tke case might bo, in fact, in business operations. And in tkis regard no disclosure or statement is made to tke state’s attorney. The claimed shortage in com was false, so tke record discloses; tke shortage reported on accounts was claimed, as if plaintiff had collected for tke accounts and not deposited the moneys; yet. even then Stinckfield knew, or ought to have known, tkat it was false to charge tke plaintiff with embezzlement of $11 wkick represented two admitted bad accounts.

Furthermore, Stinckfield testified tkat when he was checking up in dune, 1918, for tke cut off that there was not enough to cover tke sales as the sales amounted to, including the outstanding accounts which were on statements, that he had some statements of accounts in the drawer. Subsequently when he was at Kramer again he went around ■with the plaintiff and collected some accounts. The shortage -then was figured around $180. The plaintiff said that he had accounts for that but did not -want to collect them as he owed these parties private debts and was expecting money from the elevator company at the end of the year with which he was going to pay their accounts with the company. These accounts are in evidence. Exhibits 632 to 643 inclusive. Including the account of the plaintiff which ivas $31.84, they total over $218 eliminating plaintiff’s account, they total a little over $180., With two accounts eliminated which were admitted bad by Stinchfield such accounts amount to a little over $110, approximately the amount of the claimed shortage. In the evidence in response to a question by the court, the defendant’s attorney admitted that these accounts were what made the difference in cash. These accounts, as plaintiff testified, had been reported to the company. Again Stinchfield did not make a disclosure of these facts to the state’s attorney. Furthermore, plaintiff testified that Stinchfield when he came there August 1st, got the sales slips so that the company was in a position to know the outstanding accounts in connection with plaintiff’s previous monthly reports. Manifestly, it is assuming much to state upon such disclosures that, as a matter of law, Stinchfield made a full honest statement to the state’s attorney.

Assuredly, the question of whether the defendant was in good faith trying to enforce the law upon a full presentation of the facts, or ivas acting maliciously for purposes of compelling a settlement in cash by the plaintiff upon its own figures as submitted to him, was for the jury.

But the' contention is strenuously made in the petitions for rehearing and in the dissenting opinions that the plaintiff is an admitted embezzler of property and that therefore there existed probable cause for his arrest. We axe firmly of the opinion that the record warrants no conclusion by this court, as a matter of law, that this plaintiff was an embezzler of property, either through his own admission or upon the record testimony.

The defendant placed in charge of its elevator this young man, with meager education and without any experience in book-keeping methods or as a business man. The book-keeping tools that were furnished to him consisted of a cheap form of day book, individual blank sales tickets (to be sent to the general office with his reports), covering individually flour and feed, coal, and grain. Blanks were also provided for a weekly report for flour and feed sjjles, coal and wood sales, and grain and sundry sales. Also a blank for a monthly report showing a list of accounts receivable, etc. When sales were made sales tickets were likewise made. In accordance with plaintiff’s testimony, when cash sales were made, the sales slips were marked paid. Some of these tickets are marked “paid,” some charged, and many without any such notation. In this day book entries of charge accounts and, to some extent, of payments were made.

There was also a small ledger (size G by 9 in.). The plaintiff claimed in his testimony that this book never belonged to the company, that it was turned over to him, not by the company'but by the agent who preceded him, who bought it for his private use; that it was not kept for the records. The defendant maintained to the contrary. A cursory checking of the books discloses that all charges in the day book to individuals were not carried or posted into this small ledger. It is a book that concerns alone individual accounts charged.

The books were poorly kept., as might readily be expected. The chief justice in his dissenting opinions cites the Herman Thiel and Louis Sunnburg accounts to illustrate the manner in which the plaintiff did business and as illustrative of his method of embezzling the company’s property. It is well to consider these accounts. In the Herman Thiel account, the item of July 1G, 1917, for $6.50 is evidenced in the company’s record by a sales ticket issued that day for flour and is shown in the day book. The next item of July 16, is likewise evidenced by a sales ticket issued that day for coal and is shown on the day book. The item for $35 is against evidenced by a sales ticket issued on August 1, 1917, for flour and feed and is shown in the day book. Likewise, the credit item of August 2d, for $2.25 is shown on the day book. These sales tickets, in accordance with plaintiff’s testimony, w^ere sent to the company. The $4-5 item (paid to myself by rent) is not shown on the day book. It is not claimed or asserted that the plaintiff reported to the company that this $45 item was paid or collected. The plaintiff does claim that he used this book as a personal memorandum book and did make arrangements with various customers to pay their accounts to the company. In accordance with this ledger, apparently, the agent of the company who preceded the plaintiff did likewise because this very Herman Thiel account shows a credit on April 2, 1917 (before the employment of plaintiff) to wit: by house rent March, $10. Plaintiff further testified that he did not deliver these sales in payment of his own bills. Thus does the plaintiff deny delivery of company coal to pay house rent. Upon the books, accordingly, the defendant had notice of this Herman Thiel account, of its amount, and the liability of the plaintiff therefore either for cash to be paid by the plaintiff himself or to be collected from Thiel. It is to be noted here again that Stinchfield testified that he saw this ledger in April, 1918. This does not disclose, as a matter of law, property embezzlement. On June 15, 1918 (Exhibit 314) plaintiff sold to himself, as evidenced by a sales slip not marked “paid,” barley in the amount of $31.45. This again, does not disclose, as a matter of law, property embezzlement.

The Louis Sonnenberg account. The item in the dissenting opinion stating, “Amount of sales $79.20,” is evidenced by various items - in the small ledger aggregating $79.20. These various items are each evidenced by sales slips for flour and feed or coal. Three items are entered in the day book for corn. (There exists in the record apparently no individual sales slip for corn sales.) There are, however, sales slips issued to Louis Sonnenberg that are not shown in this little ledger, namely, Dec. 12, 1917, for coal, $5.90; Apr. 27, 1918, for' flour, $6.70; June 3, 1918, for flour, $4.55 (Exhibits 336, 529, 547). The credit, March 13, “by check $51.15” appearing in the ledger, is not shown in the day book. Likewise an anterior credit dated Dee. 20, 1917, “by check $39.50,” which balanced a previous account,, is likewise not shown in the day book. The $20 item of March 13, 1918, was for hay that the plaintiff purchased from Sonnenberg; it is not credited on the day book. There is no claim or assertion made thát the plaintiff embezzled either the check for $51.15 or the anterior cheek for $39.50. Again this transaction does not show, as a matter of law, that the plaintiff embezzled or intended tO' embezzle any company property. The books and the records, likewise, were irregularly and imperfectly kept, bnt the system of the defendant was to charge the plaintiff with the property that he had received and to make him account for such property; this is shown by the defendant’s attempt to hold the plaintiff responsible for a corn shortage which resulted partly from an improper price charged to the plaintiff and, partly, from the spoiling of the corn. The record does not disclose that the plaintiff concealed by the manipulation of the books any sales of merchandise whatever. If the plaintiff had kept these personal items of credit entirely absent from this small ledger which he claimed himself to be partly a memorandum book, and kept an account of the same in a separate little personal book until settlement' day with the customers, of the company, little attempt would probably have been made to claim that plaintiff was guilty of embezzling property.

Our chief justice quotes some of the testimony concerning the plaintiff’s testimony about the entries in the small ledger. He states that this served to keep Stinchfield in the dark; that this testimony served to show that the plaintiff embezzled coal. The conclusion is further drawn that the plaintiff was doing a crooked business. There is testimony in the record, however, that the amount of these accounts for which shortage was claimed was evidenced upon the records of the company by charges made to customers for each item of merchandise with sales slips for each of such articles that were reported to the company. Certain it is that these outstanding accounts amounted to the shortage for which the defendant desired a criminal prosecution upon the theory that the plaintiff had collected and appropriated the money therefor. There is evidence in the record that Stinchfield was told about these accounts by the plaintiff. There is evidence further that Stinchfield himself and plaintiff proceeded to collect some of these accounts. An account was collected from Sonnenberg; another, from plaintiff’s mother; another from Redlaczyk. Stinchfield knew about the Kretchmar account. All of these accounts were in the list that accounted for the claimed shortage of $110. At that time before the arrest the plaintiff was claiming $180 due him from the elevator company for back pay in accordance with their agreement. The amount of the accounts totaled about $180. Stinchfield knew about these accounts and was told about the arrangement that plaintiff had made for paying some of these accounts. No attempt was made to conceal this arrangement either by withholding the daily slips of merchandise sales or by concealing the arrangement of plaintiffs bills to defendants’ customers. The jury were warranted, in our opinion, in finding as they did that the plaintiff had neither intent nor desire to embezzle plaintiff’s property. On this feature, the court fully charged the jury as follows:

“If Mr. Shong was actually guilty of having embezzled either money or property of the company there was probable cause for the criminal prosecution. If you find that the defendants in this lawsuit, because of the conditions of the records kept by the plaintiff, were unable to say definitely whether the plaintiff had embezzled money or property of the Atlantic Elevator Company, and acted in good faith in charging the plaintiff with embezzlement of money, and proofs on the criminal trial showed it was property instead of money that was embezzled, and plaintiff was guilty of embezzlement in that form, then, in that case, you are instructed that there was probable cause for his arrest, probable cause existed for his arrest on the charge of embezzlement of either money or property, and your verdict must be for the defendants for a dismissal of this action. If you find from the evidence in this case that Shong did not disclose to Stinchfield the outstanding accounts which he now claims were coming to the company, or any of such, so that on balancing his accounts there appeared to be a money shortage, then Stinchfield and the company would have had probable cause for believing Mr. Shong guilty of having embezzled funds to the extent of that apparent shortage, even though it may now appear there was no shortage in fact.”

The chief justice is assuming erroneously that this court is determining that there was want of probable cause to believe the accused guilty of embezzlement. Such is not the case. This question upon this record was for the jury, and the jury have found that there was want of probable cause by their verdict. This court has reviewed the record and in the opinion of the majority it has found, as a matter of law, that the jury did not err in so doing.

In point of fact, if these accounts, amounting to over $170 were accounts of the company, collectable as such, there was no shortage. The company did attempt to collect them and did make collections therein. These facts were for the jury. In point of fact, further. there was no shortage- on plaintiff’s part in any event if the company did owe him as he claimed $180 for back pay and in addition two weeks’ wages in August, 1918. It is apparent that the defendant was acting upon the theory that it was the duty of the plaintiff to account to the defendant for any shortages of grain bought and for any shortages of coal or flour and feed sold, determinable through the gross receipts and gross disbursements, and that, if he failed so to account, he was guilty of embezzlement of money. Apparently, afterwards, when it appeared from this small ledger that the plaintiff was making settlements with customers through an exchange of debts, with the promise to pay the amount of plaintiff’s personal debt to the company,the claim then was asserted that the plaintiff was embezzling the company’s property.

Upon the entire record we are satisfied that the findings of the jury should not be disturbed. The jury evidently found, through the ver*dict rendered, that the defendant through malice and acts of oppression attempted to take advantage of plaintiff’s ignorance and inexperience; that the plaintiff, thus assaulted and charged with crime, did not meekly submit but chose to fight and defend his reputation. The record discloses much publicity resulting to the effect that the plaintiff was guilty of a shortage with the defendant. He was deprived of his liberty for several days; his ability to secure employment was affected. The plaintiff has testified that he incurred expenses of $650 in defending the criminal action.

The chief justice asserts that the verdict $2,200 rendered is not merely excessive but that it shocks the conscience and has no support in the evidence. It is well to answer such assertion by his own opinion in the case. Huber v. Zeisler, 37 N. D. 556, 562, 164 N. W. 131. In that case the plaintiff was arrested upon the criminal charge of adultery. He was a married man, forty-eight years old with seven children. The record does not disclose that he was deprived of his liberty. Special damages including proof of attorneys’ fees of $500 and of other expenses aggregating the total sum of $850 escaped without any comment by our present chief justice that such fees were exorbitant or that tlio case was a contingent fee case. There is no issue or facts in this record concerning contingent fees. The chief justice in that case had no hesitancy in stating that the verdict was far from boing excessive; that it might well have been for $5,000. The court unanimously held in that case that the verdict was not excessive. We find in this case that it is not excessive as a matter of law. Apparently, in the former case our chief justice recognized the philosophy of lago in Othello: “He that filches from me my good name robs me of that which not enriches him and makes me poor indeed.” Likewise, he might recognize in this case.

We should all be able to agree that, upon this record, the jury, as triers of facts, were warranted in concluding that the defendant without reasonable excuse or probable cause accused the plaintiff of the embezzlement of money; that unconscionably it attempted to collect from him a claimed corn shortage that was wrong and improper. That unconscionably it threatened the plaintiff with criminal prosecution unless he paid all of the claimed shortage together with expenses. See Rhoads v. First Nat. Bank, 37 N. D. 421, 437, 439, 163 N. W. 1046.

The justification for this too extended opinion is based upon the necessity of answering small excerpts of the testimony quoted in the dissenting opinion and the broad conclusions drawn therefrom, and to demonstrate, in a manner- that a large record of evidence, with a multitude of exhibits, all submitted to a jury, must not be judged and determined by fragmentary quotations therefrom. The petition for rehearing is denied.

Oi-ikisttansokt and Bibdzebl, JJ., concur.