Weldon v. State
81 So. 846, 1919 Ala. App. LEXIS 89, 17 Ala. App. 68 (1919)
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Rule of Law:
When a servant or agent receives money from a third party for the master, the fraudulent appropriation of that money constitutes embezzlement, not larceny, if the money has not yet come into the master's constructive possession through delivery or deposit into a designated account.
Facts:
- The defendant served as the city clerk and tax collector for the city of Talladega.
- As part of his duties, the defendant was responsible for collecting money for both the city and the Talladega light and water commission, and then depositing these collections into the bank.
- During the period of the indictment, there was a shortage of approximately $2,300 between the amount collected for the light and water commission and the amount that was deposited.
- The city of Talladega maintained a special property interest in the money collected for the light and water commission.
- Evidence suggested the defendant converted the $2,300 before it was deposited into the banks to the credit of either the city or the light and water commission.
- There was a casual mention of a cash drawer where another collector (Osborn) would place money collected for the city or water company, and the defendant would then deposit it, but it was not established that this was an official city-provided depositary.
Procedural Posture:
- The defendant was convicted of larceny in a lower court (presumably a trial court).
- The defendant appealed the conviction, arguing that the facts did not support a charge of larceny.
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Issue:
Can a defendant, who collected money as an agent and fraudulently appropriated it before depositing it for the principal, be convicted of larceny?
Opinions:
Majority - Sameord, J.
No, the defendant cannot be convicted of larceny under these facts because the money never came into the principal's (city's) possession. The court reasoned that larceny requires a trespass, which is a wrong against possession. When property is appropriated by a servant who is already in possession, it must be shown that the property was in the master's constructive possession at the time. For property to be in the master's constructive possession, it must have first been in the master's possession and then delivered by the master to the servant. However, if money comes into the servant's possession directly from a third person and has never been in the master's possession, and the servant converts it, this constitutes embezzlement, not larceny. The court noted that a servant holds possession, not mere custody, of property received from a third person for the master until it is delivered to the master or deposited in a master-provided depositary. In this case, the state's evidence indicated the money was collected but not deposited, thus never reaching the city's constructive possession. The court considered the possibility of a cash drawer being a city depositary, which would change the scenario to larceny if the money was deposited there and then taken, but concluded that the evidence did not establish it as such. Therefore, the court held that the defendant could not be convicted of larceny and the lower court erred in denying the general affirmative charge for the larceny count.
Analysis:
This case clearly distinguishes between larceny and embezzlement, particularly in the context of an agent's or servant's handling of funds. It emphasizes that the crucial factor is who held legal possession of the property at the moment of conversion. The ruling clarifies that if an agent receives property from a third party on behalf of a principal and converts it before the principal takes possession (e.g., through a designated deposit), the crime is embezzlement due to a breach of trust, not larceny which requires a wrongful taking from the owner's possession. This distinction can significantly impact how prosecutors charge offenses involving employee theft, requiring careful attention to the chain of possession.
