People v. Talbot

Rule of Law:

The fraudulent appropriation of corporate funds by an officer for personal use constitutes embezzlement, and the requisite fraudulent intent can be inferred from the act of knowingly and intentionally using the funds for a purpose other than that for which they were entrusted. An intent to repay the funds, or the fact that the appropriation was done openly without concealment, does not negate the criminal intent required for embezzlement.

Facts:

• James A. Talbot, Clarence M. Fuller, and Raymond W. McKee were high-level executives at the Richfield Oil Company who exercised almost autocratic control over the company's affairs.
• It was a common practice at Richfield for officers and employees to have drawing accounts and receive advances of corporate funds for personal use, which were recorded on the company's books.
• In October 1929, Talbot directed that a $50,000 Richfield check be sent to a stock brokerage firm to cover personal margin calls for himself and Fuller.
• Also in October 1929, Talbot and Fuller arranged for a $50,000 Richfield check to be issued to Fuller, which was part of a $100,000 payment to the same brokerage firm to cover margin calls on an employee stock account.
• Fuller also used several other company checks totaling over $125,000 during October 1929 for personal expenses and to protect his margin accounts.
• In November 1929, McKee ordered a $15,000 Richfield check to be issued to repay a personal loan he had received from a third party.
• The withdrawals by the defendants were made openly, without attempts at concealment, and were charged against their personal accounts on the company's books.
• The board of directors had not authorized these specific withdrawals for the executives' personal use.

Procedural Posture:

• James A. Talbot, Clarence M. Fuller, and Raymond W. McKee were charged by indictment in a trial court with one count of conspiracy to commit grand theft and nine separate counts of grand theft.
• The defendants were tried jointly before the trial court without a jury.
• The trial court acquitted all three defendants on the conspiracy charge but found each defendant guilty on various individual counts of grand theft.
• The defendants' motions for a new trial were denied by the trial court.
• The defendants separately appealed their convictions to the District Court of Appeal, Second Appellate District, which affirmed the judgments of the trial court.
• The Supreme Court of California then granted a hearing to review the decision of the District Court of Appeal.