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Government of Virgin Islands v. Richards

decided: March 3, 1980.



Before Gibbons, Weis and Garth, Circuit Judges.

Author: Weis


The Virgin Islands Criminal Code proscribes embezzlement by an agent or an individual intrusted with property for the use of another. The defendant was convicted on four counts under this statute for converting money given to him for the purchase of automobiles. The jury was given the alternative of finding guilt under either an agency or entrustment theory. We conclude that there was insufficient evidence to establish agency in any of the counts but enough testimony on entrustment in three counts to require that they be retried. The evidence in the fourth count, however, does not meet the statutory requirements on either ground and on that charge judgment of acquittal will be entered.

After a jury trial, the defendant was convicted of four counts of embezzlement under V.I. Code Ann. tit. 14, § 1091 (Equity 1964), in connection with transactions where he failed to deliver certain automobiles for which he had been paid. The statute reads:

"Whoever, being a trustee, banker, merchant, broker, attorney, agent, assignee in trust, executor, administrator, or collector, or person otherwise intrusted with or having in his control property for the use of any other person, fraudulently appropriates it to any use or purpose not in due and lawful execution of his trust, or secrets it with a fraudulent intent to appropriate it to such use or purpose, is guilty of embezzlement."

In the information the defendant was described as "WILLIAM A. RICHARDS, agent, Ken-Ric Motors, Inc." Testimony at the trial established that he was the president, sole stockholder, and only employee of Ken-Ric Motors, a firm engaged in the business of selling and repairing new and used automobiles on St. Croix. Ken-Ric was not an authorized dealer for any specific make of car but, at the request of customers, purchased specified makes and models of automobiles from sources on the mainland. The transaction with Roy Hendrickson, one of the complaining witnesses, was similar to those forming the substance of the other three counts on which Richards was charged.

Roy Hendrickson testified that in October of 1976 he went to Richards' office to purchase a 1977 Oldsmobile Cutlass Supreme and made a deposit of $650 at that time. In December Hendrickson paid an additional $1,000. On that occasion, he obtained the car's serial number from the defendant and used it in applying for a $5,000 loan from a local bank. The loan was approved in January 1977, and the bank issued its check for $5,000 payable to "Roy Hendrickson & Ken-Ric Motors, Inc." Hendrickson testified that when he took the check to Richards and endorsed it, Richards said the money was to be sent to Miami to the man who would supply the car. The witness said that he agreed to buy the car for a total of $7,600, the final $1,000 to be paid on delivery. (No explanation was given as to why the total payments exceeded the agreed upon purchase price.) A Ken-Ric Motors' business form dated January 14, 1977 and signed by the parties included a description of the car and its price.*fn1

On cross-examination, Hendrickson said that he had agreed upon the price and had no concern about where the defendant secured the car or whether he paid more or less than $7,600 to secure it. Although Richards promised to deliver the automobile, it never arrived on St. Croix, and he did not refund the money to Hendrickson.

The trial judge charged the jury that in order to convict, they had to find that the defendant was the agent of Roy Hendrickson and the other parties, or that they had "intrusted" Richards with property. "Intrusted" was said to imply "some sort of direction or trust, not just given, not just handed over money." In addition, the jury was asked to determine whether the money became the property of the defendant or was still the property of those who had given it to him. The court charged the jury, "You will have to decide was it simply a sale and a purchase of an automobile." The jury, found the defendant guilty on all counts. On appeal, the defendant contends the government failed to establish an agency or other fiduciary relationship essential to the crimes charged.

Embezzlement did not exist at common law but is a statutory crime developed in response to a gap in the law of larceny. To convict a person of larceny, the prosecution was required to prove that the accused had come into possession of the goods by committing a trespass. For example, a servant who came into lawful possession of goods destined for his master could not be guilty of larceny if he fraudulently converted them. See R. Perkins, Criminal Law § 3, at 287 (2d ed. 1969). In response, statutes have been enacted to cover such varied situations as bailments, trusts, consignments, employment, and others that fall outside the confines of the larceny definition. See Note, Criminal Breaches of Trust A Statutory Survey, 39 Colum. L.Rev. 1004 (1939).

The Virgin Islands Criminal Code devotes several sections to embezzlement. Section 1087 defines the offense as the fraudulent appropriation of property by a person to whom it has been entrusted. Section 1089 makes embezzlement by public and private officers a crime. Section 1090 penalizes embezzlement by carriers. Section 1092 proscribes embezzlement by bailees, and § 1093 covers embezzlement by clerks, agents, and employees.

The defendant was charged with violating § 1091 the terms of which implicate fiduciary relationships. The statute lists, among other categories, trustees, attorneys, agents, executors, administrators, and others "intrusted with or having in his control property for the use of any other person . . . (who) appropriates it to any use . . . not in the due and lawful execution of his trust . . . ."

Some forms of embezzlement require that the object of the offense be "the property of another." See, e. g., V.I. Code Ann. tit. 14, § 1093 (Equity 1964) (embezzlement by clerks, agents, employees, etc.). Under § 1091, however, this is not required. That section requires only that the property be "for the use of any other person." As one commentator explains, "The embezzler starts with lawful possession and may have title, as in the case of a trustee. But the title of a trustee is a restricted title, held only for the purpose of the trust, and the beneficial ownership is in the one for whom the property is held." R. Perkins, supra at 291; cf. People v. Sobiek, 30 ...

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