Court Opinion

ID: 8761470
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:08:13.900611+00
Date Added: 2024-06-11T17:01:35.714657
License: Public Domain

ARCHBALD, District Judge
(concurring). The request of the defendant for binding instructions went to the whole case, and so to every part of it. It was not necessary to specify or repeat it as to each of the hundred different counts of the indictment. It is therefore available at this time upon the question of the sufficiency of the evidence rto sustain a conviction on the third count, as to which alone there was a verdict of guilty. Aside from this, and without any such request, under the authority of Twining v. United States (C. C. A.) 141 Fed. 41, and the cases there cited, we would have the right, and it would be our duty, to look into the record, and to reverse, if the proper evidence was not found there. The difficulty with the case is that the jury declared the defendant guilty on .a count, as to which the evidence was the. least conclusive. This is probably attributable to the somewhat questionable instruction that, if they were satisfied that there was a willful misapplication of the funds of the bank by the $10,000 loan of July, 1901, this disposed of the whole case, and they need not go into anything which occurred thereafter, and to the entry, upon the return of a conviction as to the count which covers this, of not guilty as to the rest. This did not take out of the case, however, as contended, the evidence of subsequent transactions, whatever may be the seeming inconsistency in declaring them innocent, while holding otherwise as to the original, upon which they are merely cumulative. They could still be resorted to for the purpose and intent of the defendant, as manifested by his repeated diversion of the funds of the bank for his own benefit, regardless of the risk in which it was being thus involved.
That the defendant was guilty of a serious misapplication of the funds of the bank, within the meaning of the law, when he obtained the loan in question, on his own unsecured individual note, there can be but one opinion. The only question is whether he was chargeable with the delinquency as president, and whether there was evidence of a fraudulent or willfully injurious intent. But that it was calculated to work injury is clear, and he liad no right to impose upon the bank the danger of loss which it unmistakably involved. It is true that the financial credit of the defendant at the time is not shown; and, as president of the bank, it may be assumed that he was a person of some reputed means. Nor did he fail until fully two years later. But he was already heavily indebted to the bank;-a material portion of the indebtedness being in the shape of overdrafts or forced loans which he had been apparently unable to take up. He was also' engaged in stock speculations, the ultimate cause of his downfall, from *359which the transaction cannot be detached; the $10,000 obtained being admittedly for the purpose of making good his margins, on pressing calls from his brokers. It is in the willingness to put the bank at this peril that the intent to injure or defraud appears. There did not have to be a direct mental purpose to that effect. No doubt he intended to repay. But, on the question of intent, a person is rightly held to the natural and probable results of what he does. A reckless act, moreover, is always regarded as the equivalent of a willful one, and that at least was here. The possibility of injury was apparent on the face of the transaction, notwithstanding which the interests of the institution of which he was the trusted head were put aside, and his own made paramount, in utter disregard of the outcome. This fully justified the imputation of a wrongful intent, whatever there may have been in fact.
It was necessary to show, however, that the misapplication of the funds of the bank so made was ascribable to the defendant as president, with regard, to which it is confidently affirmed that there was no proof. The loan, as it is said, was obtained in the ordinary way, of the cashier, who in the interim between board meetings was, intrusted with full authority to discount paper, and was subsequently submitted to the directors, by whom it was,passed. This is undoubtedly a turning point in the case. The knowledge of the directors is strenuously denied, but is not vital. The defendant’s position would, no doubt, be materially strengthened if this was established. He was not precluded, simply because he was president, from borrowing from the bank in the ordinary way with the approval of the governing hoard, and a conviction for misapplication of money obtained with such sanction, even though there was nothing but his own obligation to secure it, would be difficult to sustain. But the knowledge of the directors was disputed, and the jury may have found against it, which makes it of no particular moment here. The case thus comes down to whether there was any evidence that it was by means of his official relation that the money was secured. Upon that it is said that the defendant, although president, took no particular direction in the affairs of the bank, as might be implied, and shared no authority with the cashier to act for the directors between boards; and that there was nothing to show that by virtue of his office he constrained the cashier into making the loan, but, on the contrary, that he got it «just as any one else would. But the case is not altogether so. It fails to regard several things. It will hardly be contended, for instance, that, if one unconnected with the bank had asked for a loan under similar circumstances, it would have gone through. It may possibly be that a customer of large and unquestioned means would have been able to get a loan of $10,000, for the purpose of stock speculation, on his own individual and unsecured note, even in the face of overdrafts and obligations of the magnitude and long standing that there were here. But not by any means the ordinary man, nor this defendant, aside from his official relation. In view of this, it is the natural, if not the inevitable, conclusion that it was out of favor to and in regard for his position as president, and so by virtue of it within the meaning of *360the law, as the defendant had good reason to believe, that he got the money as he did. It is so remarkable and inexplicable upon any other basis that an inference to that effect was clearly warranted, and that is all that we need to know. Apart from this it is a question whether an officer of a national bank, directly or indirectly dealing with its funds can ever put the relation aside. But, without passing upon that, it is enough that in any degree it enters into it, of which there was sufficient evidence here.
I therefore concur that the judgment should be affirmed.