Caseflicks

Court of Appeals of Kentucky (pre-1976) • 1932

Morgan v. Commonwealth

47 S.W.2d 543 | 242 Ky. 713 | 1932 Ky. LEXIS 352

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Takeaway

In short, this case holds that an employee who is entrusted with possession and control of an employer's money commits embezzlement, not larceny, by later converting it.

Background

Morgan supervised Western Union's Irvine, Kentucky office. He alone actually knew the combination to the office safe; a second copy was sealed and held at the company's Nashville office for use only if his employment ended. He also held the keys to a portable steel box kept inside the safe. Each night, he placed the office's daily receipts in that box, then removed them in the morning for change, bank deposit, or remittance to Western Union.

On July 5, 1930, the safe was found open, its handle and dial broken, and the steel box—containing about $90 in company funds—was gone. The empty box was later found in a field near Morgan's boarding house. Assuming the Commonwealth's evidence was sufficient to let a jury find that Morgan took the box and converted its contents, Morgan was convicted of grand larceny and sentenced to two years in prison. He appealed, arguing that the proof, if it established any crime, established embezzlement rather than larceny.

Issues

Issue #1

Whether Morgan could be convicted of grand larceny when the evidence showed that he had possession, rather than mere custody, of the company's funds when he converted them.

Holding

No. Morgan's alleged conversion was embezzlement, not larceny, because he had possession of the funds as Western Union's entrusted agent.

Reasoning

The distinction between larceny and embezzlement turns on whether the accused had only custody of the property or had possession of it. Larceny requires a trespassory taking from the owner's actual or constructive possession. Embezzlement instead covers a fraudulent conversion by a person who initially received lawful possession of another's property.

A servant who has only limited custody—for example, a household servant using an employer's goods—may commit larceny because the employer retains constructive possession. But an agent entrusted to carry, manage, control, or deposit money generally has possession until the money is delivered to the principal, delivered to someone for the principal, or put into a repository that the principal or superior agents can access or control.

Morgan had possession of the funds. He was in full charge of the local office, he alone actually knew the safe's combination, and he alone held the keys to the inner steel box. Western Union expected him to place the daily receipts in the safe at night and retrieve them in the morning for office business, deposit, or remittance.

Western Union retained a right to demand the money and could theoretically obtain the safe combination by opening its sealed copy. But the company did not intend to exercise control over the safe or its contents while Morgan remained in charge absent an unusual circumstance. Its potential ability to obtain access did not mean that it had actual or constructive possession at the time of the alleged conversion.

Because Morgan's alleged act was a conversion of property already in his lawful possession, it amounted to embezzlement rather than a trespassory taking constituting larceny. Larceny and embezzlement are distinct offenses, not different degrees of the same offense.

Issue #2

Whether the trial court should have granted Morgan's request for a peremptory instruction on the grand-larceny charge.

Holding

Yes. The proof could not support a conviction for grand larceny, so the trial court should have directed a verdict for Morgan on that charge.

Reasoning

Even accepting the Commonwealth's proof that Morgan removed the steel box and converted the approximately $90, the proof established the wrong offense for the indictment. Since the alleged conduct was embezzlement and Morgan was charged only with grand larceny, he could not lawfully be convicted of larceny.

The Court therefore reversed the judgment and directed that Morgan receive a new trial consistent with its conclusion that the larceny charge could not be sustained on these facts.