People v. Wiman

VAN BRUNT, P. J.

In the disposition of this appeal it does not seem necessary to discuss all the interesting questions which have been presented by the counsel in their arguments. There is substantially no conflict of evidence; and the questions which arise thereon relate to the inferences which necessarily must be or which may be drawn therefrom. It appears that for some time prior to the 1st of January, 1889, one Robert G-. Dun, the defendant, and others had been engaged in the business of carrying on a mercantile agency, the principal place of business being the city of New York. On said last-mentioned day the said Dun, the defendant, and one Arthur J. King and Robert D. Douglass entered into an agreement whereby they agreed to associate themselves in the business of carrying on a mercantile agency for the period of five years then next ensuing. Such agreement recited that the said Dun was the proprietor and sole owner of the business known as the “Mercantile Agency,” which had been for many years and still was conducted under the name of R. G-. Dun Sc Co. and Dun, Wiman Sc Co. in various cities in the United States and elsewhere, and of all the chattels, plant, fixtures, records, and other property used in said business, as well as the good will thereof, and of said firm names. This agreement provided; That Dun should contribute to the business the property above mentioned and described, but that said property should remain his sole and undivided property, and neither the association nor any other member of it had, nor by said agreement should acquire, any right, title, or interest therein. That Wiman, King, and Douglass should devote their whole time and attention and labor to the work of promoting, enlarging, carrying ón, and making profitable the said business. That for their services Dun should pay to them and to each of them as follows: To Wiman, a sum equal to 17 per cent, of the net profits of the business; to King, a sum equal to 6 per cent, of said net profits; and to Douglass, a sum equal to 5 per cent, of the net profits,—Dun agreeing that the sums to be paid for such services in any one year should not be less than $10,000 to Wiman, $5,000 to King, and $5,000 to Douglass. Thé agreement further recited that the association was formed for the purpose of encouraging and stimulating in the said Wiman, King, and Douglass a jealous pride and ambition in the character and repute of the said business, as well as to induce their extraordinary exertions in building up and extending the business and increasing its profits; and that to that end the articles provided that their compensation should be to some extent contingent upon the profits of the business, but that as to them the amount of the profits only afforded the basis of determining the amount of their salaries, and that neither of them had 'any right, title, or interest in or to the said profits, as such. Then followed provisions as to how the term “net profits” should be construed, and how they were to be ascertained; also, a provision for the termination of the association at the will of any party thereto by his giving oral or written notice to any other party thereto of his election to terminate; and that the association should be terminated by the death of Wiman, King, or Douglass. The agreement further provided that upon the termination of the association Dun should have the sole and exclusive right to the possession and control of all the property of said agency, and of the records and books of account thereof, and to the liquidation, adjustment, and settlement of the affairs thereof. Then followed provisions relating to the event of the death of Dun pending the term of the association, and that the business during the term of the association should be carried on under the name or style of B. G-. Dun & Co.

By the seventeenth article of said agreement it was further provided:

“That no party to this agreement shall at any time use or employ the said name of R. G. Dun & Co., or any name under which said business shall be carried on, for any purpose except the regular and proper business of the said Mercantile Agency, and that neither the said Wiman, King, nor Douglass shall use the said name in making, signing, drawing, or indorsing any note, bill of exchange, draft, or other obligation or evidence of debt, excepting only indorsements of such papers for the pup>ose of depositing the same to the credit of the said association or of collecting the same for the account of ■the association.

By the eighteenth clause it was provided:

“That neither the said Wiman, King, nor Douglass shall in his own name sign or indorse any note, negotiable instrument, obligation, undertaking, or evidence of debt, as security, either in form or in fact, without the written consent of said Robert G. Dun.”

By the twenty-second article of the agreement, Wiman was permitted to draw each month $3,000, King $1,000, and Douglass $1,000, from the cashier of the agency.

From the time of the entering into this agreement, in January, .1889, as had been done for many years previous, business as a commercial agency, in the name of R GL Dun & Co. in the United States, and Dun, Wiman & Co. in Canada, was carried on. The general affairs and business of the concern were under the defendant’s charge and control, subject to Dun’s directions, except the department relating to New York City, which was in charge of King, and the other agencies in this state, which were in charge of Douglass. In the conduct of the financial affairs of the association more than three-quarters of all the checks issued by the concern in the course of its business were signed by the defendant in the firm name of R G-. Dun & Co., the others being signed principally by Douglass, one of the other members of the association; Dun taking but little apparent interest in the business, and being absent more than half of the time. It seems to be admitted by the learned counsel for the defendant that under the prohibition contained in the seventeenth article of the agreement neither of the associates other than Dun would have had the right to sign any checks. But an examination of this clause seems to us to lead to a different conclusion, and that it was never intended to deprive the members of the association of the right to sign the checks of the concern; and that, when bills of exchange, drafts, or other obligations or evidences of debt were referred to, it was not thereby intended to include the checks which were necessary to be signed and issued in the ordinary transaction of the business, but had reference to the other classes of mercantile paper which would come under the definition of “bills of exchange, drafts, or other obligations or evidences of debt.” In fact, the practice under the agreement showed that it was not so construed by any of the parties thereto, inasmuch as checks were uniformly and almost exclusively signed by others than Dun. Therefore, in the consideration of the relation of these parties to each other, we must assume that there was no intention to restrict the rights of those associates in respect to the drawing of checks in the ordinary course of the business of the agency. It seems to have been assumed that, by reason of the association of these parties together, they would have the right to use the firm name in respect to the business of the association generally; and, in order to restrict this right, it was considered necessary to insert the prohibition contained in the articles of the association. The management of this business, as has already been stated, except in respect to the city of New York and the agencies in the state of New York, was in the hands of Wiman; and Wiman, Douglass, and King substantially managed the whole business of the association, with little interference upon the part of Dun. For several years prior to the 6th of February, 1893, the defendant had been largely overdrawn in his accounts with the association, to the knowledge of Dun. Upon that day, the defendant, desiring an additional sum of $5,000 for his own purposes, directed the cashier of the concern to draw a check for $5,000 to the order of one E. W. Bullinger, to whom the concern was then indebted in a sum of at least $15,000, telling the cashier at the time that Bullinger wished a check on account. The cashier filled up the check according to the defendant’s direction, and delivered it to him unsigned. Upon receiving the check, the defendant signed it “R. G. Dun & Co.,” as he had the right to do, and then indorsed thereon the name oí Bullinger, and, indorsing it in his own name, deposited the check to his own credit in the Central National Bank, and used the money for his own purposes. Bullinger had made no demand on R. G. Dun & Co. or the defendant for $5,000 on the 6th of February, and he never saw the check until the 17th or 18th of February, 1893, and never authorized the defendant to sign his name on the back of that or any other check, or in any way upon apiece of commercial paper. The defendant was subsequently indicted for forging the name of Bullinger upon the back of this check with intent to defraud, and also for uttering the same with like intent. Upon the trial the defendant was convicted of forgery in the second degree, and from the judgment thereupon entered this appeal is taken.

Various questions are presented for our consideration, among which is the question as to the relation which Dun, Wiman, Douglass, and King bore to each other in respect to this business. It was held upon the trial that the associates were not partners, but that Wiman, Douglass, and King were substantially employés upon a salary. As between the parties, the question as to what relationship has been created by association depends largely upon intent. We think it would not be disputed for a moment but that the parties to this agreement became partners as to third persons. But it is contended upon the part of the prosecution that no such relation existed as between themselves. As already suggested, the solution of this question depends largely upon the intent of the parties entering into this agreement and association; and, while it may not be possible to dispose of this question in the affirmative as a matter of law, yet there seems to have been amply sufficient to go to the jury thereon. These parties were associated together in a common enterprise. The written agreement seems to have been intended to prevent Wiman, King, and Douglass from having any interest in the plant of the business, which belonged to Dun; and the business generally was to be subject to the control of Dun in so far as he desired to act contrary to the wishes of his associates. But in all other respects the associates of Dun were to have the right to conduct the business, and they did conduct it, with but little interference or supervision upon the part of Dun. For the protection of his capital, Dun placed certain restrictions upon the rights of his associates which he conceived that they undoubtedly would have had in the absence of such restrictions; hence the article in regard to commercial paper, etc. But it was nowhere believed necessary to confer by this instrument any authority upon Dun’s associates to do anything in connection with the business. The scope of the agreement is almost entirely prohibitory, and does not attempt to confer any authority or rights, except in so far as it may define the extent of the interest which the associates were to have in the association. It was assumed'by all these associates that as a result of the association, as matter of law, Wiman, Douglass, and King, as well as Dun, could sign the firm name, except where prohibited by the articles of agreement. If they were not copartners,—if it was not the intention that they should be copartners,—where did the associates of Dun get this authority? It cannot be found in the agreement; and yet it was taken as a matter of course. It is further to be observed that the association might be terminated at any instant, at the will of any party thereto, by his giving oral or written notice to any other party thereto of his election to terminate it. Hence, if Wiman, King, and Douglass were mere employés of Dun, one employé by giving notice to another employé had the power to terminate the employment of all; a fact inconsistent with the idea of mere employment.

It seems to us upon a consideration of these facts that at least the jury would have been justified in finding that it was the intention of these associates that they should be partners in this adventure, and have all the rights of partners, except in so far as they were restricted by the terms of their agreement of association. If the jury so found, then Wiman, Douglass, and King were equally with Dun liable for the expenses of the business, which amounted to $2,500,000 per year. They were entitled to have the receipts of the business applied to the payment of these obligations,, and it was error, therefore, to rule, as the court did, that it was clear that Dun was the owner of the receipts of the business, and thus deny all rights of his associates in such receipts.

The court was requested to charge as follows:

“That, in determining the power and authority of Wiman in respect to the business of the firm, the jury is not bound to consider the written articles of copartnership alone, but may also consider the manner in which the parties actually conducted the business of the firm; and, where the letter of the articles was knowingly and intentionally departed from by the parties, the practice and custom of the parties, rather than the letter of the articles, shall control”

In answer the court said:

“Subject to what I stated to you, gentlemen, I so charge,—subject to my general charge.”

The general charge of the court had been that under the contract and the letter, hereinafter referred to, received by the defendant, he had no right to take from the assets of the firm to his own use more than $3,000 a month. The court also stated to the jury that the question for them to decide was:

“Did he write the name of Bullinger on the back of that check with intent to get this money from the firm, that he had no right to take, and apply it to his own purposes? In other words, did he write the name of Bullinger upon the back of that check with the intent to defraud Mr. Dun or his partners?”

The evidence in this case showed that, to the knowledge of Dun, Wiman had been in the habit of overdrawing his account for several years. Dun would protest, Wiman would repent, and, to Dun’s knowledge, repeat the offense immediately thereafter. On the 12th of January, 1893, Dun .wrote to Wiman protesting against his overdrafts. Wiman replied, admitting the charge, explaining the reasons why it had occurred, and promising not to increase the amount; and shortly thereafter he drew the check and made the indorsement in question, in accordance with his usual habit. It would seem,

under these circumstances, that it was a question for the jury to determine as to whether the prohibitions of the articles of association had not been so far departed from and so habitually transgressed, to the knowledge of the party now claiming to have been defrauded, that upon the act of the defendant in drawing the check in question, for the purpose of transferring a portion of the funds of the firm to his own private account, a criminal intent to defraud could not be predicated.

The further question presented is as to whether an intent upon the part of the defendant to defraud his copartners would be sufficient to justify a conviction of forgery under this indictment. By the charge of the court, all questions as to whether the indorsement was made with intent to defraud Bullinger or to defraud the bank in which Wiman deposited the checks were excluded from the consideration of the jury. The only fraud which it was claimed the defendant had attempted to perpetrate was upon the firm of R G-. Dun & Co. Unless, therefore, the unauthorized indorsement of the check was made with the intent and for the purpose of defrauding the firm, the defendant was entitled to an acquittal. If Wiman was a member of this firm, the withdrawal of these funds from the assets of the firm for his own purposes would not constitute a criminal offense. Even if he was not a member of the firm, he was authorized to draw the firm checks; “and abuse of that authority, even though otherwise criminal, would not constitute forgery. It might be, under such circumstances, a fraud upon the firm, but such fraud would not of itself constitute the crime of forgery.” If Wiman was a member of the firm, the misappropriation of the funds of the firm to his own use would not subject him to criminal process; and, even if not a member of the firm, he having authority to draw the check in question,—the crime alleged relating solely to the indorsement,—the criminal intent must apply, not only to the drawing of the check, but to the unauthorized indorsement. The evidence in this case shows that the intent to defraud, if any existed, related entirely to the drawing of the check, and that the unauthorized indorsement was resorted to for the purpose of concealing the overdraft. It is conceded that there was no intention upon the defendant’s part to defraud Bullinger, nor is it claimed that he believed that Bullinger could incur any liability because of such indorsement, as the defendant well knew, and as the court charged the jury, he believing that the check would be paid on presentation at the bank upon which it was drawn, the firm having ample funds to meet the same. It would seem that the intent to defraud which is spoken of by the statute must have some relation to the act which is claimed to constitute the forgery; and where the alleged forgery is committed, not for the purpose of defrauding by means thereof, but for the mere purpose of concealing the misappropriation of money, it does not constitute the crime. This principle is recognized by Wharton (section 1444), where he says that in forgery it is not necessary to have in mind an intent to defraud a particular person, if the consequences of the act would necessarily or might possibly be to defraud any person. But there must, at all events, be a possibility of some person being defrauded by the forgery. There was no possibility of Dun & Go. being defrauded by the alleged forgery in this case.

That it was- necessary that this intent to defraud in reference to the matter of indorsement should be present seems to have been recognized by the court when it instructed the jury, at the end of its charge, that if they found that Wiman believed that under the rules of law applicable to commercial paper he had legal authority to use the name of a person as payee to whom it was not intended that the check should be paid, and to indorse such name on the back of the check, such indorsement is not 'forgery. The court, however, during the progress of the summing up of the counsel for the defendant, declined to permit him to discuss the facts and circumstances upon which this proposition is predicated. The court interrupted the counsel for the defendant in his summing up, and the counsel stated that his summing up related to this proposition, which he would request the court to charge as follows: “I shall ask your honor to charge the jury that, if the defendant believed that under the rules of commercial law he had legal authority to make this check and indorse it as he did, the crime is not forgery.” The court answered: “That I shall refuse.” The counsel for the defendant excepted, and then proceeded with his summing up, abandoning his argument upon that point. As has been seen, the court at the close of the charge presented the proposition to the jury, and no opportunity was offered for the counsel to address the jury in respect to the point in the discussion of which he was interrupted. Nor was there any retraction by'the judge of what he had said dur ing the summing up. There were thus two inconsistent propositions before the jury, and it is impossible to determine by what rule they were guided in the consideration of the case.

The court also seems to have entirely taken from the jury the question of criminal intent. The defendant requested the court to charge as follows:

“Unless the jury find that the acts charged were committed with criminal intent, the defendant is entitled to an acquittal.”

In answer to this request, the court said to the jury:

“I charge you, unless the act was committed with intent to defraud, as 1 explained it to you, the defendant is entitled to an acquittal. I refuse to charge as requested.”

• During "the charge the court charged the jury in respect to the meaning of the word “defraud” as follows:

“ ‘Defraud’ has been defined as follows: ‘To deprive of right, either by obtaining something by deception or artifice, or by taking something wrongfully without the knowledge or consent of the owner.’ And I think that this is as good a definition of ‘defraud’ as I know of.”

It will be at once seen that this definition is fatally defective, so far as relates to criminal proceedings, as the last branch of the proposition takes no cognizance whatever of the question of intent. The jury were by this definition, in effect, charged that if Wiman wrongfully took, without the knowledge or consent of Dun, the money in question, although he may have believed that he had the right to take the money, he was guilty of the intent to defraud required by the statute; thus, as has already been intimated, eliminating, the one element which it has been repeatedly held must be present, namely, the criminal intent It is undoubtedly true that, in order to constitute a crime, the doing of the act prohibited, with the intent to do the act, is sufficient, although the party may not be aware of the fact that he is transgressing the law. But there is no possibility of an act of fraud being committed without a fraudulent intent. The word “fraud” imports guilty knowledge. A man supposing that he has a right to property, and taking it without the knowledge or consent of the owner, would under this definition be held to be defrauding the owner if it should subsequently turn out that his supposed right was without foundation. In order that there should be no mistake upon this point, the court, subsequent to the giving of this definition, expressly charged the jury that the question for them to determine was: “Did he write the name of Bullinger on the back of that check with the intent to get this money from the firm that he had no right to take, and apply it to his own purposes?” No question of criminal intent was submitted, the only question of intent submitted being an intent to do an act which was not, by any means, of necessity criminal. Even if Wiman believed he had the right to take this money because of the course of previous dealings, the jury were instructed that, if he took it intending to take it, he was guilty of an intent to defraud. An intent to defraud would seem to involve some moral turpitude; but under this instruction a mistake as to property rights is of itself sufficient to justify a finding of fraud. This is carrying the definition of “fraud” much further than has yet been done. We think that in thus instructing'the jury the question of criminal intent was entirely eliminated, and under these circumstances the refusal of the request to charge was error.

There would seem also to have been error either in the admission or the exclusion of testimony. The prosecution were permitted to prove the overdrafts of Wiman, and his want of funds in the bank to meet the same, upon the theory that this evidence was competent upon the question of the intent to defraud Dun and his associates by the drawing of the check in question. But when the defendant attempted to establish his pecuniary condition by showing the value of the property which he owned, that evidence was excluded. And it seems to us, certainly, that, if it was competent upon the part of the prosecution to prove the indebtedness of Wiman on the question of his intent, he had the right to prove the means which he had to meet such indebtedness, in order that he might rebut any inference which might be drawn from such indebtedness. It is not intended to countenance for a moment by this suggestion the theory that, if Wiman was guilty of a forgery in the .obtaining of this money, the fact that he intended or hoped or expected to return it in any way qualified the nature of his act. It would certainly be an anomaly in the law that an intent to make reparation, and the ability to do so, would make acts innocent which otherwise would be criminal. The taking of the money of another knowingly wrongfully is to defraud; and the act is not qualified by the intent to return. The thief cannot be heard to say: “It is true I stole the money to-day, but I intended to return it to-morrow, and therefore I am innocent.” Nevertheless, as already stated, if it was competent for the prosecution, for the purpose of showing intent, to prove partially the financial condition of Wiman, he had a right to prove the balance. The judgment should be reversed, and a new trial ordered.