Source: https://supreme.justia.com/cases/federal/us/215/233/
Timestamp: 2019-04-22 00:06:29+00:00

Document:
Whether the person deceived by false entries is the person intended by the statute, and whether the averments as to the deceit are sufficient to sustain the indictment, are questions which involve the construction of the statute on which an indictment for making false entries in violation of § 5209, Rev.Stat., is based, and this Court has jurisdiction to review under the Criminal Appeals Act of March 2, 1907, c. 2564, 34 Stat. 1246.
The construction of a statute in a particular in regard to which no question was raised will not prevent the determination as an original question of how the statute should be construed in that particular when controverted in a subsequent case.
The rule of strict construction of penal statutes does not require a narrow technical meaning to be given to words in disregard of their context and so as to frustrate the obvious legislative intent.
entries with the intent to deceive any agent appointed to examine the affairs of a national bank includes an attempt to deceive the Comptroller of the Currency by false entries made in a report directly to him under § 5311, Rev.Stat.
Where intent is an essential ingredient of a crime, it may be charged in general terms, and its existence becomes a question for the jury, excepting only where the criminal intent could not as a matter of law have existed under any possible circumstances.
Under Rev.Stat. § 5209, false entries as to the condition of a national bank may be made with intent to injure the bank even though they show the bank to be in a more favorable condition than it actually is, and the question of intent to injure is one for the jury.
The facts, which involve the construction of § 5209, Rev.Stat., are stated in the opinion.
The trial court quashed portions of each count of the indictment and sustained a demurrer to the remainder. This direct review is sought because of the contention that the rulings in question were based on a construction of Rev.Stat. § 5209.
examine, etc. The demurrer challenged generally the sufficiency of the averments of each count.
It is insisted that there is no jurisdiction to review, because the decision below was not based upon the invalidity or construction of any statute. We think that, within the ruling in United States v. Keitel, 211 U. S. 370, the construction of Rev.Stat. § 5209 was involved. The suggestion of want of jurisdiction is therefore without merit.
In disposing of the merits, we shall consider separately the rulings on the motion to quash and upon the demurrer.
1. The motion to quash.
The motion was sustained upon the theory that no offense was stated by the charge of making a false entry in the report to the Comptroller of the Currency, with the intent to deceive an agent appointed to examine the affairs of the bank, viz., the Comptroller of the Currency, because that official was not such an agent. While this was the only question actually decided, nevertheless the reasoning which led the court to the conclusion by it applied went further, and caused the court to declare that the statute, in the particular mentioned, was in effect inoperative. This because not alone was the intent to deceive the Comptroller of the Currency not embraced, but also the intent to deceive an agent appointed to examine was excluded so far as a report made to the Comptroller was concerned, as such agent would be required to examine the books and papers of the bank, and not a report made to the Comptroller.
violation of this section, shall be deemed guilty of a misdemeanor. . . ."
Before analyzing its text, we briefly refer to authorities relied upon on one side or the other as affirming or denying the correctness of the construction affixed to the section by the court below.
In United States v. Bartow, 10 F. 874, Benedict, District Judge, sustained a motion to quash certain counts of an indictment which charged the making of a false entry in a report to the Comptroller of the Currency with the intent to deceive that officer, and held in a brief opinion that the Comptroller was not an agent appointed to examine the affairs of a national banking association within the meaning of the statute.
"If the statements of Thomas be taken as true, he, although verifying the reports as cashier, could not be held criminally liable for their falsity, since he took and believed the statements of Cochran and Sayre as to the truth and correctness of such reports. If this be true, there was lacking on his part that intent to defraud the association or to deceive the Comptroller of the Currency which is made, by § 5209, a material element of the offense."
deceiving the Comptroller of the Currency, or some other person or persons alleged in the said indictment."
"The intent must have been, as laid in the indictment, to mislead and deceive one of these parties, either some of the officers of the bank or the officer of the government appointed to examine into the affairs of the bank. . . . So that you must find not only the fact that there was an omission to make the proper entry, but that with it was an intent to conceal the fact from somebody who was concerned in the bank, or concerned in overseeing it and supervising its operations and the conduct of its business."
"That is quite correct so far as the allegation concerning the intent to deceive the Comptroller is concerned. Such intent is not one of those requisite under § 5209 to constitute an offense. But the contention is not correct insofar as the allegation relates to the intent to deceive an agent who might be appointed to examine the affairs of the bank."
of the statute was taken for granted, and hence the mere assumption which was indulged in deciding the Cochran case should not now prevent a determination of the significance of the language of the statute. As the report of the Cochran case indicates that the premise relied on is true, we come to consider the meaning of the section as an original question.
"Every association shall make to the Comptroller of the Currency not less than five reports during each year, according to the form which may be prescribed by him, verified by the oath or affirmation of the president or cashier of such association, and attested by the signature of at least three of the directors. Each such report shall exhibit in detail and under appropriate heads the resources and liabilities of the [associations] [association] at the close of business of any past day by him specified, and shall be transmitted to the Comptroller within five days after the receipt of a request or requisition therefor from him."
"The object in construing penal as well as other statutes is to ascertain the legislative intent. . . . The words must not be narrowed to the exclusion of what the legislature intended to embrace, but that intention must be gathered from the words, and they must be such as to leave no room for a reasonable doubt upon the subject. . . . The rule of strict construction is not violated by permitting the words of the statute to have their full meaning, or the more extended of two meanings, as the wider popular instead of the more narrow technical one; but the words should be taken in such a sense, bent neither one way nor the other, as will best manifest the legislative intent. "
It is to be observed that the rule thus stated affords us ground for extending a penal statute beyond its plain meaning. But it inculcates that a meaning which is within the text, and within its clear intent is not to be departed from because, by resorting to a narrow and technical interpretation of particular words, the plain meaning may be distorted and the obvious purpose of the law be frustrated. Bolles v. Outing Co., 175 U. S. 262, 175 U. S. 265, and especially United States v. Union Supply Company, decided this term, ante, p. 215 U. S. 50.
Indeed, the aptness of the application of the principle just stated to the case in hand is well illustrated by the following considerations. If, by distorting the rule of strict construction, we were to construe the words of the statute "any agent appointed to examine" so as to exclude the Comptroller of the Currency, the principal agent appointed for such purpose, by the same method we should be compelled to adopt the reasoning of the court below, and to narrow the statute so as to exclude the intent to deceive by false entries in the report an agent to whom the report was not to be made, and who might not be called upon to examine the same, thus, in effect, as to intent to deceive any agent, destroying the statute. And this impossible conclusion at once serves to point out the correctness of the interpretation of the statute assumed in the Cochran case -- that the intent to deceive for which the statute provides is an intent to deceive the official agents concerned in overseeing the bank and supervising its operation and the conduct of its business, including, of necessity, the Comptroller of the Currency and the subordinate agents or examiners whom the statute authorized him to appoint.
"The indictment also charges that the entries were made with intent to injure and defraud the bank itself; but how this could be does not appear. It is barely possible that some harm might indirectly have come to the bank by the publication of the false report in the vicinity of the place where the bank was located, but this possibility is not sufficient to show the definite intent shown by the statute. The report must have been made with the purpose on the part of those signing it to injure and defraud the bank. The report could not possibly change the actual condition of the bank, and a false report showing a better condition than in fact existed might as readily be a benefit to the bank as a detriment. At all events, the detriment would be merely speculative, insufficient to afford proof of a positive intent to injure and defraud the bank."
this view would do violence to the statute, which exacts truthful reports upon the conception that the knowledge by the officials of the government of the true condition of the bank is conclusive to the safeguarding of its interests and its protection from injury and wrong. It was undoubtedly within the power of the Comptroller of the Currency, if the bank was out of line, or if its affairs were in a disordered or precarious condition, or if its officers had embarked in transactions calculated to injuriously affect the financial condition of the bank, to apply a corrective, and thus save the bank from injury and future loss. Certainly as a matter of law it cannot be held, although such transactions were concealed in a report made to the Comptroller by false statements exhibiting a more favorable condition of the bank than would have appeared if the truth had been stated, that no intent to injure the bank could possibly be imputed even although the necessary effect of the false statement was to prevent the Comptroller from exerting the powers conferred upon him by law for the protection of the bank from injury. And these considerations also effectually dispose of the theory that the acts charged to have been falsely reported, in and of themselves, were of such a character as to exclude the possibility of a criminal intent to injure the bank. The counts charged false entries as to the amount of bad debts due the bank, as to the suspended paper held by the bank, as to the amount due the bank by its president as indorser, guarantor, or otherwise, and as to the assets of the bank, by reporting that it owned various pieces of real estate which it really only held as security. We are of opinion that the alleged false statements did not so exclude the possibility of an intention to injure the bank as to justify so declaring as a matter of law, and that the case should have been submitted to a jury to determine the question of intent in the light of all the facts and circumstances existing at the time of the making of the alleged false entries.
MR. JUSTICE McKENNA and MR. JUSTICE DAY do not think the Comptroller is within the words "any agent," and dissent from that ruling. In other respects they concur.

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