Court Opinion

ID: 7807373
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:08:11.24453+00
Date Added: 2024-06-11T16:30:22.015930
License: Public Domain

Hart, J., (after stating the facts). The defendant was indicted under section 1814 of Kirby’s Digest, which is as follows: “No bank shall accept or receive on deposit, with or without interest, any money, bank bills or notes, or United States treasury notes, bills or drafts, circulating as money, or currency, when such bank is insolvent ; and any officer, director, cashier, manager, member, party or managing party of any bank who shall knowingly violate the provisions of this section, or be accessory to, or permit or connive at the receiving or accepting on deposit of any such deposit, shall be guilty of a felony, and upon conviction thereof shall be imprisoned in the State, penitentiary not less than three years and not more than five years. ” Statutes have been enacted in a number of States making it a crime to receive deposits into a bank if it is known bjr the officer receiving-the deposits that the bank is in an insolvent condition. The purpose of these statutes is not only to protect innocent depositors but to deter bank officials from so conducting the business of the bank as to endanger its solvency. 3 Buling Case Law, § 117, page 490.  (1) The word “draft” as used in the .section of the statute above quoted, is a general term, and includes cheeks as well .as other orders drawn for the payment of money. State v. Warner (Kan.), 55 Pac. 342.  (2) When the cashier .in the instant case received the check he oharg’ed the account of Norris with the amount of the check and credited Harris with the amount thereof. It is claimed by counsel for the defendant that because no new money came into the bank that there was no violation of the statute. The money was in the bank, or was supposed to be there, and the transaction was considered and treated as though the cashier had actually paid over the money to Harris and that Harris had immediately redeposited it in the .same bank. The transaction was not essentially different from what it would have been had the whole amount of the ©hecks been received from other sources and then deposited in the blank. State v. Shove (Wis.), 37 L. R. A. 142. In 3 Ruling Case Law, section 123, page 496, the ■author says: “The deposit need not be a deposit of money, and although a portion of the money for which the certificate of deposit is issued by a bank consists of that represented by a prior certificate of deposit against the same bank and .surrendered at the time that the last deposit is made, the last deposit and the certificate thereof must be treated as if the whole amount had been deposited in ©ash.” Therefore, we are of the opinion that the contention of counsel for defendant is not well taken.  (3) It is also contended that it was error to admit testimony of amounts loaned to I. H. Cunningham after the deposit in question was made on the first day of July, 1912. We do not .agree with them in that contention. Under the statute knowledge of the insolvency of the bank on the part of the defendant is made an essential element of the offense and the question is ordinarily one for the jury. It is not essential that knowledge be proved by direct evidence of the defendant’s state of mind, but it may be proved by circumstantial evidence. It appears from the evidence in the case that on August 6, .a short time after the deposit in question was made, that the bank was admittedly insolvent and that at that time it only had the sum of $10 in money. The proof of the loians made to I. H. Cunningham .after the receipt of the deposit in question was so near in point of time that it gave an indication to the jury as to whether or not the bank was insolvent on the first day of July, 1912, 'the date of the deposit in question. The defendant himself testified that at the time the deposit was received the bank was $7,000 better off than it was when he took charge of it las cashier. It was competent to show the amount of money that was paid to different persons after the first day of July, 1912, in order to show how much was actually on hand on that date. It was also competent to show how much money was on hand when the bank went into the hands of the receiver and by taking all the facts and circumstances into consideration the jury might determine how much money was on hand at the time the deposit was made. It is contended by counsel for the defendant that the bank was not insolvent at the time the deposit was made. It appears from the statement of facts that at the time I. H. Cunningham took charge of the bank that it had something over $13,000 on hand, and that this money had been placed there :by the depositors of the bank. The record does not disclose that the depositors drew any money out of the bank after the Cunninghams took charge of it, except the $3,800 which was placed there by I. II. Cunningham a few days before the bank closed its doors.  (4) The books of the bank show that it loaned to I. H. Cunningham and his father more than $7,000 before the deposit in question was made; that there was about $1,100 worth of notes on hand, but that these were of very little value, only about $250 being collected on them by the receiver. It is true the bank had some other notes, but they had been put up as collateral security for loans, and were worth very little more than the amount of the loans. There were some furniture and fixtures belonging to the bank, but as it will be seen from the state of facts, they were of hut little value. Therefore, it is plain that at the time the deposit was made the bank was due its depositors over $13,000 and had only cash and assets to the amount of not exceeding $7,000 with which to pay it. The defendant'admits that he kept the book of daily balances which showed the condition of the bank, and .although he stated that the bank was in a solvent condition, from the testimony introduced 'the jury might well have inferred that he had knowledge that the bank was not solvent at the time he received the deposit.  (5) Counsel for defendant .also assigns as error'the ■action of the court in admitting in evidence a certain note signed by I. H. Cunningham for $1,084.84, dated August 12, 1912, together with a slip of paper attached thereto bearing the words “shortage in cashier’s account.” The admission of the testimony occurred in this way: McEachin, the former cashier of the bank, testified that after it closed its doors in August, he took charge of the affairs of the .hank and had the ¡accounts of the cashier audited. He was asked to state what the auditor’s statement showed with reference to the cashier’s account. The attorney for the defendant objected on the ground that the statement should show for itself. McEachin was then asked if I. H. 'Cunningham had not signed a note for $1,084.84, dated August 12, 1912, and replied that he did. He was then asked what the note was given for, and replied that it was given for a shortage that showed in the cashier’s account. He further stated that W. R. Cunningham was the cashier referred to, and that the shortage covered the period from the time they purchased the bank until it failed. No objection was made by counsel for the defendant to this testimony. The attorney for the defendant then asked the witness why the defendant’s name was not signed to the note, and the witness replied that he was sick at the time the note was given. He was then asked why he didn’t make the note show it was given for a shortage in his account, and the witness replied that the slip attached to the note showed that fact. The attorney for the defendant then objected to the introduction of the slip. The court then reminded the attorney that the witness had answered the question in regard to the slip as propounded by him. The attorney for the defendant then asked him again why he did not write in the note that it was given for a shortage, and the witness replied that there was a mortgage given to secure the note and that the slip was attached to the note for information. From this it will be seen that the admission of the testimony in regard to what the slip attached to the note shewed was in response to a question asked by the defendant’s attorney; and, if there was error, it was invited error, and no reversal of the judgment can be had on account of it. It was competent to show that the cashier’s account was short $1,084.84, for the reason that it tended to show whether or not the bank was solvent or insolvent at the time the check from Norris to Harris was given. No objection was made to the testimony. If objection had been made to it on the ground that it was only competent as tending to show the solvency or insolvency of the bank on the first of July, 1912, doubtless the court, at the request of counsel for the defendant, would have limited it to that purpose. It is also assigned as error by counsel for the defendant that the court admitted the testimony of the receiver to the effect that he had talked with P. W. Cunningham and I. H. Cunningham, the father and brother of the defendant, and that they admitted that their home was covered by a mortgage; and also testimony to the effect that he had investigated dhe solvency of these parties and found that they were insolvent. This testimony was competent as tending to show whether the bank was insolvent or not at the date the check from Norris to Harris was deposited in the bank, the Cunninghams being large borrowers from the bank at that time. Prom the close relationship and association of these parties with the defendant, the jury might .have inferred that he knew of the fact of their insolvency. The judgment is affirmed.