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July 19, 1951



David E. Cohen, Uniontown, S. V. Albo, Pittsburgh, for appellant.

Fred L. Brothers, Dist. Atty., T. J. Kalman, Asst. Dist. Atty., Uniontown, for appellee.

Before Rhodes, P. J., and Hirt, Reno, Dithrich, Ross, Arnold, and Gunther, JJ.

Author: Reno

[ 169 Pa. Super. Page 253]

RENO, Judge.

Defendant, a public accountant, was convicted on four separate indictments of fraudulent conversion of moneys given him for payment of income taxes to the Federal Government. This appeal questions the lower court's refusal to withdraw a juror and alleged errors in the charge of the court.

For many years, Klein's Department Store in Point Marion, Fayette County, employed the accounting agency of William A. Wood to audit the store's books and handle all tax matters. In 1944, defendant was the accountant assigned by the agency to make Klein's monthly audits and prepare tax returns. In February, 1949, the Internal Revenue Department informed Klein's Department Store of an additional tax for 1944 of $2,387.72 plus interest. Klein notified the accounting agency of this additional assessment and arranged for monthly payments. The payments were made in the following manner: on April 11, 1949, he gave defendant a check drawn to defendant's order for $449.77;

[ 169 Pa. Super. Page 254]

    on May 9, 1949, a check to defendant's order for $400; on June 6, 1949, a check for $548; and on July 12, 1949, a check in the amount of $550. These four monthly checks totaled $1,947.77. In the middle of August, 1949, Klein was notified by the Internal Revenue Department that payments on his additional tax assessment were in arrears. He immediately notified Mr. Wood who ascertained from the taxing authorities that payments had been made on May 3, 1949, of $250, and on June 17, 1949 of $237.72. In other words, defendant had failed to remit $1,460.05 of Klein's money to the Government. Wood discussed the matter with defendant, who was no longer in his employ, and showed him the figures. Defendant's reply was: 'I'll take care of it.' On August 30, 1949, a payment was made of $1,360.05*fn1 which amount was credited to the Klein account on September 14, 1949. The balance of the tax assessment was paid by Klein on November 1, 1949.

In the course of his argument to the jury the district attorney in referring to defendant's payment of the balance of the funds entrusted to him said: 'He goes to another client and gets this money to pay this debt.' Defendant objected to the remark and requested a juror be withdrawn. Denial of defendant's motion was not an abuse of discretion. Behrens v. Mountz, 37 Pa. Super. 326; Fahrer v. Blumenthal, 125 Pa. Super. 568, 190 A. 206. The district attorney was illustrating the impossibility of a conviction for fraudulent conversion if the jury accepted defendant's theory that mere repayment of the funds converted would absolve defendant of liability. Furthermore, the trial judge in his charge instructed the jury to disregard the statement.

[ 169 Pa. Super. Page 255]

The fact that defendant subsequently paid the money to the taxing authorities is immaterial. The gist of the offense of fraudulent conversion is the withholding of another's property with the intent to defraud or deprive that other person of the use and benefit of his property and to convey or apply the same to defendant's own use or benefit as against the owner's. Penal Code of June 24, 1939, P.L. 872, § 834, 18 P.S. § 4834; Com. v. Kniel, 150 Pa. Super. 290, 28 A.2d 326. The crime was complete when defendant fraudulently retained the money instead of paying the taxes as he agreed. Even had he intended to repay the money it would not be a defense. Com. v. Shutts, 163 Pa. Super. 415, 62 A.2d 82. Satisfaction of a private wrong is not a bar to a criminal prosecution. Com. v. Heckman, 113 Pa. Super. 70, 172 A. 28.

Where defendant, as here, is lawfully in possession of property, the general rule is that before an indictment for fraudulent conversion can be sustained there must be evidence of a demand and refusal to redeliver. Com. v. Winegrad, 119 Pa. Super. 78, 180 A. 160. While the jury may well have found such demand from Wood's testimony we believe the conviction can be sustained on broader grounds. A demand may not be necessary under certain circumstances. Com. v. Neuman, 151 Pa. Super. 642, 30 A.2d 698. 'Absence of a demand is not controlling where the element of actual misapplication is made out by other evidence.' Com. v. Schuster, 158 Pa. Super. 164, 167, 44 A.2d 303, 306. See also 53 Am.Jur., Trover and Conversion, § 88, and 65 C.J., Trover and Conversion, § 56. The fact that defendant was given possession for an express purpose and knew the money ...

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