Court Opinion

ID: 9446744
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:17:15.41336+00
Date Added: 2024-06-11T17:30:45.649448
License: Public Domain

MADDEN, Judge
(dissenting).
This is not a case in which the Court is urged to set aside the conviction of an obviously guilty person because of technical errors which might have, but probably did not have, an appreciable effect upon the outcome of the trial. It is a case in which, in my opinion, the trial resulted in the conviction of a man who was shown by the evidence not to be guilty of the crimes for which he was tried and convicted.
There is no real disagreement as to the objective facts. Mr. Rick was the manager of the Adam, Meldrum and Anderson Branch of the Manufacturers and Traders Trust Company of Buffalo. He had been an employee of the Adam, Mel-drum and Anderson State Bank since 1915 and had been its president from 1943 until it, in March of 1956 became, by merger, a branch of the Trust Company. As president of the bank, before *709its merger, Mr. Rick had had dealings with the defendant. After the merger, the defendant in November 1956 opened an account with the branch bank, Mr. Rick personally handling the transaction.
In December of 1956 Mr. Rick cashed a number of checks drawn by the defendant on a Niagara Falls bank. The defendant informed Rick at the time Rick cashed these checks that the checks were not good, i. e., that the defendant did not have sufficient funds in the Niagara Falls bank to cover the checks. Rick was, nevertheless, willing to cash the checks and did cash them. This process was repeated many times between December of 1956 and about the middle of May 1957. Some of these checks were sent by mail from the Buffalo bank to the Niagara Falls bank. The first four counts of the indictment of the defendant involved this use of the mail in May of 1957.
These counts of the indictment charged that the defendant
“did represent to the Manufacturers and Traders Trust Company that there were sufficient funds in the * * * (Niagara Falls) account to meet and pay the said personal checks previously drawn, whereas, in truth and in fact, said defendant then and there well knew that there were * * * insufficient funds * * * to pay said checks.”
It is an uncontested fact in the case that the defendant did not make such a representation. It is likewise uncontested that, contrary to making such a representation he had done exactly the opposite, he had advised Rick that the checks were not good.
How, then, does one deal with the allegation in the indictment about the false representation? The Government says that although the defendant informed Rick, the only person in the bank with whom he had conversation, that the checks were not good, nevertheless he represented to “the bank” that the checks were good. That would be as if a bank were a disembodied entity, in which no human being was needed to determine to whom the bank should lend its money, for a day or a week or a year. If a private banker, the sole proprietor of a bank, should cash a check on another bank after being advised that it was not presently good, but would be made good at an early date, it would, of course, be impossible to draw the Government’s distinction between “the bank” and the banker. The bank and the banker might lose the money, or they might gain the goodwill of an impecunious genius like Henry Ford or Thomas Edison and share the fabulous success of the person so improvidently trusted.
There are indications in the record that the defendant may have been a professional gambler. Why Rick, with forty years’ experience as a banker, was willing to trust him, we do not know. That he did trust him, and therefore advanced money to him against his checks, knowing that the checks were not good, is uncontested.
It would be more nearly possible, physically and philosophically, to accept the Government’s differentiation between the bank and the banker, and thus find misrepresentation in law where there is none in fact, if the human being listening to the customer, and handing out the bank’s money, were acting, not in the interest of the bank, but in aid of the customer’s attempt to cheat the bank. Such a case was Stevens v. United States, 8 Cir., 227 F.2d 5, in which the defendant induced the cashier of the bank, by tips amounting to $5,000, to join in the defendant’s check-kiting scheme. Where the bank’s employee connives with the customer to cheat the bank, he shares in the financial spoils, or is rewarded in some other way. In the instant case there is not a whisper of evidence that Rick profited to the extent of one penny, or otherwise, from these dealings which ran into tens of thousands of dollars.
The Government produced Rick as its witness. His testimony, which was un-contradicted and in every respect believable, seemed to me to be the story of a banker who, having made what turned out to be a bad loan to a person of pre*710carious and uncertain income, frequently thereafter has to make the choice as to whether to call the loan and irrevocably precipitate the bank’s loss, or lend more money in the hope of keeping the borrower in business and ultimately salvaging the entire debt, with interest. Rick was not the first banker who faced that problem, nor will he be the last. Bankers have won and have lost in such experiences. If they lose too often, they can’t go on being bankers. Rick’s experience with the defendant included the ups and downs of such a situation. There were times when the defendant got hold of large sums of outside money and used it to reduce his debts to Rick’s bank. At one time, some two months before the structure crashed on Rick’s head, the defendant had reduced his obligations from $29,000 to $17,000. That, no doubt, gave Rick hope that all might turn out well.
Rick’s conduct showed, and his un-contradicted testimony, vouched for by the Government, and confirmed by the circumstances that he acted, throughout his dealings with the defendant, for the bank and for no one else. In his position, the defendant as well as any other person dealing with the bank had a right to assume that he had the power to make unsecured loans, permit overdrafts, or give credit by cashing checks on other banks which were not immediately good. If his doing any of these things was in excess of his authority from his principal, the Trust Company, that is no reason why his customer should be sent to the penitentiary. If his doing so violated some law of the State or the Federal Government, which is not asserted by the Government in this case he, not the customer is answerable for that. If, in order to deceive the auditors and keep alive his hope of collecting this debt, he falsified the bank’s records, he, not the customer, is answerable for that.
There is not a breath of evidence in this case that the defendant did not intend to pay back the money that was advanced to him. The evidence shows that in many cases he received money from Rick, the advance being made against the defendant’s check, and paid it back the same day, as he had promised. It shows that when he got his hands on outside money, he used it to reduce his debt to Rick’s bank. The evidence is completely consistent with the conclusion that he was, like many optimistic borrowers, hopeful that he could take borrowed money and make money with it. His occasional successes fortified his hope. At the crucial time he could not pay his debt. That may have proved that he was reckless and foolish, but one is not sent to the penitentiary for recklessly and foolishly incurring more debts than he can pay.
The Government is sensitive about the use of the word debt in connection with the defendant’s actions, no doubt because the word has no criminal implications. But what, may one ask, is it if not a debt, when one receives money in return for a post-dated check, or for a presently dated check which the one who advances the money is told is not presently good. If not a debt, what is it? Is it a larceny, or an obtaining by false pretense, though there is no false pretense ?
The District Judge gave the following instruction to the jury, somewhere about the middle of a long series of instructions :
“If you find tfiat the defendant did not intend to deceive the Manufacturers and Traders Trust Company to whom the checks specified in the mail fraud counts of the indictment were presented for cashing, you must acquit the defendant on such mail fraud counts.
“The mere fact that the defendant cashed checks at the Manufacturers and Traders Trust Company which would constitute overdrafts on his account at the Niagara Falls Branch of the Liberty Bank is not sufficient to justify a conviction on any count of the indictment.”
After the Court had completed its long charge to the jury, Government counsel specifically requested that his charge 10
*711be read to the jury and the Court read it, as follows:
“If you find beyond a reasonable doubt that the defendant presented checks for payment to a bank, knowing that there were insufficient funds in his account, in the drawee bank to pay such checks, such presentment and receipt of cash or other items by the defendant amounts to false and fraudulent representations to the bank, even though certain bank officers knew that the checks were no good and cashed them, and would amount to fraud as against the bank by the defendant even though he and the officers might have hoped that this enterprise would end successfully.”
This instruction, which was adequately excepted to by the defendant, calls for several comments.
1. It is undoubtedly wrong. It simply cannot be true that such a transaction engaged in innocently and in good faith could lay a basis for a criminal prosecution.
2. This instruction, given at the most impressive time in the course of the Court’s instructions to the jury, flatly and completely contradicted the Court’s earlier instruction, quoted first above, which earlier instruction was unquestionably right. If the giving of instructions by the Court to the jury is anything more than a futile and insignificant solemnity, it surely cannot be tolerated that the Court, impressively and just before the case is given to the jury, erroneously instruct the jury as to the most decisive question in the case, and that the error be treated as cured by thumbing back through the pages of a long series of charges and finding one that is right.
3. The instruction last quoted above was a charge to the jury to find the defendant guilty on the four mail fraud counts. It fitted the uneontested facts of the case with exactness. The defendant had presented these checks knowing they were not good, the principal officer of the bank knew they were not good, and the defendant’s position was that he and the bank’s officers hoped that the enterprise would turn out successfully.
When the defendant’s counsel excepted to the charge quoted above because, he said, it should have included a statement that “the jury must find criminal intent on the part of the defendant as you have defined it,” the Court said, laconically, “I have so charged and I repeat the charge.” This incorporation by reference of what had been said somewhere else in the Court’s long charge to the jury could not have, in effect, withdrawn the specific instruction which he had just given that the mere physical acts which had admittedly been done were, per se criminal.
The four counts, fifth through ninth, on which the defendant was convicted, and on which conviction the second five years of his ten year sentence was based, charged the defendant with aiding and abetting the misapplication of funds by a bank officer. It is conceded that, for the defendant to be guilty of this criminal offense of aiding and abetting, Rick must have been proven guilty of the criminal misapplication of the funds of the bank.
No real effort was made to prove that Rick was guilty of a criminal misapplication of the funds of the bank. He was presented as a witness for the Government ; he was questioned at length about the physical acts done by him and by the defendant. He was not asked by the Government about the purposes which caused him to do what he did. It was not intimated, in his examination or otherwise in the evidence, that he profited financially or otherwise in the transactions recited. On cross-examination he repeatedly and categorically affirmed that all of his actions were done in the interests of the bank, as he saw those interests. No evidence was introduced by the Government to contradict this testimony of its own witness. Yet the defendant stands sentenced to five years in the penitentiary for aiding and abetting the criminal acts of one as to whom there *712is no proof of criminal acts. In effect the Government says that the criminality of Rick’s acts was so obvious that it needed no proof; that its placing Rick on the stand and vouching for his integrity as a witness cannot bind it to the non-existence of a state of facts palpably and undeniably existent. But this palpable and undeniable state of facts would have to be Rick’s criminal intention to defraud his bank.
Let us examine into this necessary criminal intention of Rick, without which the defendant’s conviction could not stand, which criminal intention is supposed to be so obvious that it stands on its own feet, though contradicted by the testimony of the Government’s own witness. Rick had been honorably engaged in the banking business for 40 years. He had been president of the very bank in question for 12 years. When his bank was absorbed by the Trust Company, he was made its manager, its highest executive officer. He was, on account of his age, nearing the end of a long and honorable career, with no breath of suspicion of his integrity. He then, the Government tells us, formed an intention to cheat his bank, though he knew that he was endangering his most prized reward for a lifetime of banking, his unspotted reputation for integrity; though he knew that he was exposing himself to the probability of spending his declining years, not in well earned retirement, but in a State or Federal Penitentiary. And he is supposed to have formed this intention to destroy his reputation and imperil his freedom, for what? For nothing. Absolutely and literally, for nothing at all.
In the early stages of Rick’s dealings with the defendant, Rick advanced his own personal funds to the bank to cover the defendant’s checks. Those advances added up to some $13,000. Yet in all of his later financial dealings with the defendant, including the repayment by the defendant of many thousands of dollars, Rick never repaid himself a penny of these personal advances.
Rick was not prosecuted for the supposed crime to which the defendant was convicted of being an accessory. The prosecuting attorney has discretion as to whom he will prosecute. In the instant case there was, in addition to and above all other reasons, the best of all possible reasons for not prosecuting Rick, i. e., that it was unthinkable that he could have been convicted.
This case was, at best, a difficult one for a jury to analyze intelligently. It involved concepts difficult of apprehension even by a subtle mind. Misrepresentation to the bank accompanied by full and truthful disclosure to the banker; aiding and abetting the commission of a crime which the evidence, common sense and human experience show was not committed; these are concepts which, if within the grasp of anyone, are not within the collective grasp of a lay jury without careful guidance. I think that the verbose, confused and contradictory charge of the Court was of no assistance to the jury. I think the conviction of the defendant was a gross miscarriage of justice.
I would reverse.