Court Opinion

ID: 3571033
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:23:50.823478+00
Date Added: 2024-06-11T13:49:13.461548
License: Public Domain

I have found no other fraudulent check case in which the discharge of the defendant was placed upon the ground that he had deposited bogus drafts in the payee bank, or that the payee bank was obligated to pay and carry as overdrafts his checks after it discovered that the defendant had palmed off on it and obtained credit upon bogus drafts in a total sum amounting to 160 per cent. of the capital stock of the bank. The capital stock of the payee bank, the First National Bank of Hot Springs, was $25,000.
It is not claimed that any special arrangement had been made for the payment by the payee bank of the Cox check, upon which *Page 235 
this prosecution is based. When it was presented for payment, other checks which had been accumulating for nearly a month were on file for collection amounting to more than double the capital stock of the bank. The record discloses that numerous other complaints against the defendant were filed by cattlemen. Nine other checks were sent to the payee bank by the First State Bank of Magdalena with the Cox check, and all were returned unpaid January 8th. If the defendant should be brought to trial upon nine informations, based upon the nine other checks, under the decision in this case the state would necessarily fail to make out a prima facie case; the same bank books and the same evidence of "credit" being equally relevant in all cases. And the records of the ten cases would show that the defendant was free, because we held in substance that a $25,000 bank, after it discovered that $40,000 in drafts on which it had extended defendant credit were bogus, was obligated to pay and carry as overdrafts the ten checks aggregating the sum of $49,340.12, the United States banking laws and regulations notwithstanding.
All these checks should be considered in this case in determining the intent, plan, or system of the defendant. State v. Bassett, 26 N.M. 476, 194 P. 867, 869. The rule is stated in 16 C.J. 591: "Where the crime charged is part of a plan or system of criminal action, evidence of other crimes near to it in time and of similar character is relevant and admissible to show the knowledge and intent of the accused and that the act charged was not the result of accident or inadvertence. This rule is often applied where the crime charged is one of a series of swindles or other crimes involving a fraudulent intent for the purpose of showing this intent."
It seems to me that the opinion of the court gives too much weight to the failure of the bank to promptly charge the defendant's account with the $40,000 upon receipt of notices of dishonor of the three drafts. It is putting form above substance. If accounting is exalted a few notches higher, we will discharge a highwayman who takes $40,000 at the point of a pistol because his victim had not made a debit entry of the item against the robber on his books.
Defendant's letters alone furnish substantial evidence that he was kiting drafts (Preston v. Grand Rapids Savings Bank,232 Mich. 194, 205 N.W. 49), and that he had no arrangement with the McFee Commission Company for a loan, or that a draft would be paid until sales of his cattle produced sufficient funds to meet it. On November 19th he wrote the cashier of the payee bank: "Sent you another draft this A.M. You can send them both in when you just have too will have the money there to meet them if no more delays."
After the receipt of the McFee remittance of $48,000, the defendant designated certain checks to be paid which practically exhausted the account. The cashier of the payee bank testified as follows:
"Q. Can you state whether there was at any time from November 13th on to the 8th *Page 236 
of January, when it was not, or there was not on your desk or calendar for payment checks having precedence over the Cox check and sufficient in amount to wipe out any balance that Mr. Thompson had there in his account?
"Mr. Mann: I object to this question on the same ground, identical grounds that were objected to previously.
"The Court: Overruled.
"Mr. Mann: Exception.
"A. There was enough checks there ahead of the Cox check to wipe out his account until December 4th.
"Q. And then what about December 4th? A. When this credit of $48,657.64, when that credit was given Mr. Thompson all of the checks in our files or for collection at that time were paid at Mr. Thompson's designation. Mr. Thompson was called in and designated the checks to be paid out of that credit.
"Q. Was there sufficient amount in his balance there to his credit at that time to pay all the checks that were there at your bank for collection against that account?
"Mr. Mann: I object to this on the same grounds as to previous line of similar questions.
"The Court: Overruled.
"Mr. Mann: Exception.
"Q. That is on December 4th? A. No.
"Q. Did Mr. Thompson come there to the bank on that date? A. Yes sir.
"Q. And just what did he do with reference to designating the checks to be paid? A. I took Mr. Thompson in the back room and showed him all the checks and told him to see which ones he wanted paid.
"Q. And you paid them according to his designation? A. Yes sir.
"Q. That left a balance in his account of something over — What is it? A. Left $91.97."
The cashier of the payee bank testified that for years he had assisted the defendant in a clerical capacity at certain seasons. About the middle of October he told the defendant that he would not be able to help him any more; and the cashier testified further: "A. I carried on that date, I carried back these drafts around $30,000 that he had collected at Magdalena and at that time Mr. Thompson was issuing more checks than he was receiving for the cattle. On this same date at Magdalena he cut out something like one hundred head of cows and sent them down to Socorro to a pasture that he didn't get any money for and he shipped several cars of cattle to Saint Joe, Missouri, that he didn't know what they were going to bring and it looked to me that my place was at Hot Springs in the bank."
The defendant had notice almost daily during the month of November of the accumulation of his unpaid checks in the payee bank. The cashier testified as follows: "A. During my telephone conversation and personal conversation with Mr. Thompson I urged him to take care of his account and *Page 237 
get funds that would be immediately available and to get his account in good shape so that we could take care of him as we did the previous year. These conversations took place nearly every day or night. Mr. Thompson could get me or I could get Mr. Thompson every night with a few exceptions and Mr. Thompson was advised of the condition of his account at each one of these telephone conversations. He was advised how much he was overdrawn and approximately the amount of the checks that were in the bank for payment and the condition of these drafts that were out for collection, that had been refused payment and particularly on these Santa Fe drafts, the first one, he told me that he had the money there and to return the draft to the Santa Fe bank and it would be paid. These drafts were returned from two to three times to the bank and finally payment was refused entirely."
The statute defines "credit" as follows: "Sec. 2. The word `credit' as used herein, shall be construed to mean an arrangement or understanding with the bank or depositary for the payment of such check, draft or order." (Laws 1919, c. 132.)
I can find no evidence in the record which tends to prove that at the time of the issuance of the Cox check the defendant had any arrangement or understanding with the bank for the payment of the check; the bank having discontinued paying his overdrafts, as it had a right to do. Michie on Banks and Banking (2nd Ed.) vol. 5, p. 577, says: "It has been said that the practice of paying overdrafts is based on no authority in sound usage or in law, and should be abolished. And, of course, a bank may refuse to pay an overdraft. Because a bank often lets good customers overdraw, the latter do not thereby acquire the right to do so when the bank deems it improper to permit it. And such a custom may be discontinued at any time at the bank's option, in the absence of any reliance thereon by a third person." (Citing First Nat. Bank v. First Nat. Bank. 127 Tenn. 205, 154 S.W. 965.)
On the contrary, the evidence that the payee bank had refused to pay checks of the same class as the check on which this prosecution is based, in a total amount of more than ten times the face value of the Cox check, and that these checks were on file for collection with the payee bank at the time of the issuance of the Cox check, negatives the proposition that the defendant had "credit" with the payee bank, or reasonable grounds to believe that the check would be paid. Rex v. Parker, 7 Car. 
P. 825, 2 Moody, C.C. 1; note, 35 A.L.R. 375; Wharton's Criminal Law (12th Ed.) § 1427. I therefore dissent. *Page 238