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People v. Barry

Supreme Court of New York, Appellate Division

May 7, 1909


Appeal from Court of General Sessions, New York County.

Charles Barry, impleaded with John Gundlach, was convicted of larceny as bailee, and appeals. Affirmed.

[116 N.Y.S. 871] Cantwell & Brown (William M. Cantwell, of counsel, and James W. Osborne and Paul Abrahams, on the brief), for appellant.

William Travers Jerome, Dist. Atty. (E. Crosby Kindleberger, of counsel), for the People.



The defendant and John Gundlach were jointly indicted for the crime of grand larceny in the first degree. Barry had [116 N.Y.S. 872] a separate trial. He was found guilty under the second count of the indictment, which charges larceny as bailee, trustee, and agent under the second paragraph of section 528 of the Penal Code of 36 promissory notes, for $3,000 each.

Sherman & Co. manufactured safety razors and pocket cutlery at Keyport, N. J. Desiring to increase its plant and extend its business, on April 1, 1907, the board of trustees authorized the officers to issue $150,000 worth of notes to obtain money for such purposes. Mr. Sherman, the president of the company, saw an advertisement in the Sunday Herald in the early part of April, 1907, which he answered. He received in reply a letter from Gundlach dated April 16, 1907, who stated that he was in a position to use a large amount of paper. " I have several parties who will indorse the paper and use one-half of it, paying their half on maturity or shortly before, so you will take care of your paper. This is done without any harm to your credit or banks, and your paper will go to different cities for discount.*** The cost to you for discounting will be the legal discount and 5 per cent. commission for me on your share. If you entertain this proposition, which is certainly the cheapest to you, I wish to hear from you by return mail, so I can make my dispositions and get you returns by the first part of next week." Sherman answered the letter and with his treasurer, Hull, went to New York and met Gundlach on April 21, 1907. Gundlach stated: That he had a number of principals who would use their paper in very large amounts and very quickly; that the paper would be negotiated out of town and not in New York City and would not interfere with their credit. Gundlach spoke of one of his principals in Philadelphia being very wealthy and owning many acres of coal and mineral lands and showed an agreement between Barry and himself reading as follows:

" New York, Feb. 14, 1907. Mr. John Gundlach, Dear Sir: Herewith I agree to pay you a commission of 5 per cent. on my one-half (1/2) share, or two and one-half per cent. (2 1/2%) of entire face value of all notes, that you procure for me on half basis, and that I succeed in discounting. Said commission to be payable to you immediately out of the proceeds of said notes, and same commission to you for all future business. Charles Barry."

Gundlach then said that Barry could use a large share of the Sherman & Co. paper and could discount more. Barry came into the room, whereupon Gundlach said: " Oh, There is my principal now." There was no introduction at this time. Gundlach and Sherman exchanged references and parted after some general talk. Gundlach gave Sherman a proposed form of contract which was drafted by Barry. Gundlach was a German who could not write English well, and Barry drafted the letters and documents, signed, sent, or delivered by Gundlach, who copied them. Sherman went back to Keyport, and on the next day, April 24th, he wrote Gundlach a letter:

" In accordance with your previous communication and our conversation of yesterday, we inclose you herewith 36 notes of this corporation.*** These notes are sent you with the distinct understanding that they are to be discounted and that half of the proceeds of each note is to be forwarded to us in bankable funds within twenty-four hours after the discounting. The other half or portion of the proceeds is to be retained by the parties through whom the notes are discounted or negotiated, with the understanding that [116 N.Y.S. 873] each of us, that is, the party negotiating the discount and retaining half the proceeds as well as ourselves, will pay our respective portions promptly on maturity of each note, either in cash or negotiable paper. It is understood that the cost to us for this discount shall be the bank discount on our portion as well as a 5 per cent. commission on our portion. The said commission to be deducted at the time our portion of the proceeds is remitted to us. Further than this, and if you are successful in handling this transaction for us, we hereby agree to let you have all of the commercial paper issued or to be issued by us and to make same in such amounts as you may require and fully authorize you to contract for the discounting of same on the basis outlined above.*** Kindly acknowledge receipt of our letter with inclosures and in doing so fix, if possible, an early date, when we will be informed as to the success of your efforts in arranging for the discounting. In this connection we desire to say that we do not want you to hold any of our paper for longer than two weeks after its date. In other words, if you are unable to arrange for its discounting within two weeks after the date of the paper, which will be when you get it, same must be returned to us and we will issue new paper in its stead."

On the 25th of April Gundlach acknowledged in writing the receipt of the notes, and wrote:

" Kindly expect me at your Broad street station to-morrow afternoon about 12:45 p. m. as Mr. Eisenberg requests the indorsement of your officers."

In a previous letter Gundlach had written:

" Beg to submit one of my parties who is in the fur import business, A. M. Eisenberg, 40 W. Thirty-Fourth street. While he is not using any credit here, I understand he is not rated, but is in a position to discount $50,000 or more of your paper; ...

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