210 N.W. 353 | S.D. | 1926
Lead Opinion
The defendants were jointly indicted by a grand jury in Minnehaha county. The indictment charged in substance :
“That Frank H. Johnson, * * * on (he 14th of January, •1924, * * * was president of the Sioux Falls Trust & Savings Bank, * * * then and there doing business in Minnehaha county, S. D., as a bank, and was vested with power of control and management over the fund's, property, officers, and clerks of said bank.
“That Cozad was a resident of the county of Bennett and state of South Dakota. That Johnson and Cozad then and there, * * * with intent to injure and defraud said * * * bank, and without the consent of said bank or of the directors of said bank, did willfully and feloniously misapply 'by use of a credit certain money, funds, credits and property of said * * * bank * * * by the following means: That said Johnson did cause said * * * bank to discount a certain promissory note for the principal sum of $6,500 dated January 11, 1924, * * * signed with the name of Cleo C. Smith. Said Johnson did then and there falsely*397 represent to said * * * bank that said note was secured by mortgage upon real property in Bennett county, ¡t. D., owned by said Smith. That said note was not, in fact, secured at all. That the maker was not able to pay the same as and when it would become due. That the maker did not own real property in Bennett county, S. D1. That the note was an accommodation note, and the maker had received, and would receive, no consideration therefor, and that the proceeds of said note, the aforesaid sum of $6,500', was under the direction of said Johnson, then and there knowingly and willfully, and in fraud of said bank, applied to1 the use, benefit and advantage of persons to the grand jurors unknown. And that thereafter the sum of $6,500 was through the accounts of various persons unknown withdrawn and wholly lost to said bank, and the funds and property of the same were and are depleted in that amount.
“* * * The said J. C. Cozad * * * did then and there knowingly, willfully, unlawfully, and feloniously, and with intent to injure and defraud the said * * * bank, aid, assist, and abet the said Frank H. Johnson to so willfully misapply the funds of a bank * * * in the following manner: That the said J. C. Cozad, prior to the 14th day of January, * * * did procure the signature of one Cleo' C. Smith ho a certain promissory note, * * * which said note is and was the same note so discounted by the said * * * bank, as aforesaid, well knowing that the said * * * Smith did not own any real property, * * * and well knowing that the said note * * * was in fact not secured at all, * * * and * * * well knowing that the said note * * * was an accommodation note, * * * and in accordance with an arrangement and plan theretofore had and made by and between him, the said J. C. Cozad, and the said Frank H. Johnson, * * * did thereafter, and on or about the 14th day of January, * * * deliver, or cause to be delivered, to the said Frank H. Johnson' as president of the said * * * bank, the said note so executed, * * * and that the said Frank H. Johnson and J. C. Cozad1 did thereby, and by said means, commit the crime of willful misapplication of funds of a bank through the use of a credit contrary tO' the form, force, and effect of the statute.”
To this indictment the defendant Cozad interposed his separate demurrer. From an order sustaining rhis demurrer the state
“(i) The indictment does not state a public offense even against the defendant, Frank H. Johnson.
“(2) The acts charged against the defendant Cozad not in aid of the offense attempted to be charged against Johnson.
“(3) The indictment is so indefinite and uncertain as to be violative of defendant’s constitutional right to be advised of the nature and cause of the accusation- against him.”
Under No. 1 it should be observed: The indictment is based upon section 8991, Code 1919, which makes certain acts therein specified a felony when committed by a “president, director, cashier, officer, teller clerk, employee or agent of any bank.” Under the terms of the statute the defendant Cozad could not alone bq guilty of a violation of the statute, bút he is charged as aiding and abetting his codefendant, Johnson, president of the bank, in a violation by Johnson of the provisions of the statute.
By virtue of section 4737, 'Code 1919 all persons- concerned in the commission -of a felony must be prosecuted-, tried, and punished as principals, yet the defendant Cozad, not being an officer of the bank, nor a director, employee, or agent thereof, could not himself be guilty of a violation of the statute other than by aiding and abetting therein, and, if the acts charged by the indictment to have been committed by the codefendant, Johnson, president of the bank, do not sufficiently establish a violation of the statute "by Johnson, manifestly the indictment- has not stated a public offense as against Cozad by charging him, however sufficiently, with having aided1 and abetted Johnson.
The statute on which the indictment was based reads:
“Embezzlement — Penalty. Every president, director, cashier, officer, teller, clerk, employee or agent of any bank who embezzles, abstracts or willfully misapplies or wrongfully diverts- to his own use, through the use of accommodation notes or credits, any of the money, funds, credits or property of the'bank, whether owned by it or held in trust; who- wrongfully withholds payment or remittance of the proceeds of any collection which may -come into his hands; who, without authority of the directors, issues or puts forth any certificate of deposit, draws any order or bill of ex*399 change, maíces any acceptance, assigns any note, bond, draft, bill of exchange, judgment or mortgage; or who makes any false entry in any book, report or statement of 1he bank or report or statement required by the provisions of this chapter, with intent to injure the bank or any person, or to deceive any officer ,of tirábanle, any one appointed to examine the affairs of the bank or any other person, shall be deemed guilty of a felony and upon conviction thereof shall be punished by imprisonment in the state penitentiary for not less than five nor more than twenty years.” ■Rev. Code 1919, § 8991.
It appears to be the view of respondent that no offense can be committed under this act, except by “the use of accommodation notes or credits,” 'but we are of the opinion that the words “through the use of accommodation notes or -credits” modify only the immediately preceding words “wrongfully diverts to- his own use,” and for any named officer wrongfullv to divert to his own use any of the money, funds, credits, or property of the bank through the use of accommodation notes or credits constitutes a new, separate, and distinct offense injected into the statute by the 1915 amendment and superadded to the offense previously thereby ‘designated. The various offenses specified in the statute are separate and distinct, and not synonymous, notwithstanding the fact that some of the specified offenses 'may include others. [United States v. Cadwallader (D. C.) 59 E 677; United States v, Northway, 120 U. S. 327, 7 S. Ct. 580 30 L. Ed. 664. For example, the cashier of a bank might design to take $1,000 out of the bank’s money for himself unlawfully, and the course of conduct pursued by, him in securing the single item- of $1,000 might render 'him guilty at one and the same time, under section 8991, of embezzling the bank’s money, or of willfully misapplying the 'bank’s money, of wrongfully diverting the bank’s money to his own use through accommodation notes or -credits, or of making false entries in the books of the bank with intent to deceive. Yet the offenses are absolutely distinct, and evidence sufficient to prove one offense may not be sufficient to prove another, and an indictment charging one offense is not bad because the facts therein set -out are also sufficient to establish another offense.
Respondent further -contends:
“The indictment contains no allegation that the $6,500 alleged*400 to have been received as the proceeds of the note discounted was ever withdrawn from the bank.”
Clearly the indictment -does not allege $6,500' or any other sum was received as the proceeds of the note. On the contrary, it alleges the bank received only the worthless note of Cleo C. Smith. There was therefore no special fund, and no part of the general funds, of the bank received or set apart to be traced or specifically accounted for. The phrase “proceeds of said note” used in the indictment may therefore be rejected as surplusage. The offense here charged is committed if “any of the funds of the bank” are willfully misapplied with intent to injure the bank or any person or to deceive any officer or person appointed to examine the bank or any other person. Section 8991, R. C. 1919. Stripping section 8991, R. C. 1919, of everything not applicable to the instant case, it -would read:
“Every * * * officer, * * * of any bank who * * * willfully misapplies * * * any of the * * * funds, credits or property of the bank, * * * with intent to injitre the bank * * * shall be deemed guilty of a felony.”
Treating this indictment in the same manner, we think it fairly charges that, while Johnson was an officer of the Sioux Falls- Trust & Savings Bank, and acting as such, he willfully and feloniously misapplied $6,500 of the funds of said bank by discounting the note of one Cleo C. Smith, representing to the 'bank that the note was secured on real estate, but knowing it was unsecured, without consideration and worthless. Johnson caused the bank to discount said note, and the aforesaid sum- of $6,500 was, under the direction of said Johnson, then and there, knowingly, willfully, and- in fraud of said bank, applied to the use, benefit, and advantage of persons to the grand jurors unknown, and thereafter the sum of $6,500 was through the accounts of various persons unknown withdrawn and wholly lost to said bank, and the funds and property of the same were and are depleted in that amount.
Manifestly the indictment does not charge Johnson with receiving or obtaining this money. It therefore does not charge Johnson with obtaining money by false pretenses, as respondent contends. Respondent is also- in error in his conten
“Thereafter the sum of $6,500 was through the accounts of various persons unknown withdrawn and wholly lost to said bank.”
Section 3577, R. C. 1919, provides:
“The rule of the common law that penal statutes are to be strictly construed has no application to this Code. All its provisions and all penal statutes are to be construed according to the fair import of their terms, with a view to effect their objects and promote justice.”
Section 4725, R. C. 1919, provides that the indictment is sufficient if “the offense charged is designated in such a manner as to enable a person of common understanding to know what is meant,” and section 4726 provides:
“No indictment or information is insufficient, nor can the * * * proceedings thereon be affected; by” any “imperfection in * * * form, which does not tend to * * * prejudice * * * the substantial rights of the defendant upon the merits.”
We have carefully considered the authorities cited by respondent-in which the federal courts have held statutes similar to our section 8991 should be strictly construed, but such authorities are not applicable in this state, because our Legislature has provided different rules of construction and interpretation which are binding on this court. State v. Whitmarsh, 26 S. D. 426, 128 N. W. 580; State v. Whealey, 5 S. D. 427, 59 N. W. 211. We therefore hold this indictment sufficient as to' the defendant Frank H. Johnson.
Under No. 2 it seems to be respondent’s contention that, because the indictment does not charge Johnson with being an officer of the bank until January 14, 1924,. and the only specific act of aiding or abetting charged against Cozad was the delivery of the Smith note to Johnson on that date, therefore no plan or arrangement between Johnson and Cozad or steps taken by either of them to commit the crime charged prior to that date could be shown, or, if shown, would be in aid of the crime charged. In other words, Cozad could not be charged with aiding or abetting a crime until such time as it was shown Johnson could have committed .it.
Under No. 3 respondent contends that, because the indictment alleges Cozacl did, on January 14, 1924, “deliver, or cause to -be delivered” the Smith note to Johnson, his constitutional rights have been invaded; 'in other words that the indictment does not appraise him of the acts and facts which it is claimed constitute the offense charged against him. The offense charged against Gozad is not delivering or causing to be delivered a note. It is aiding Johnson in misapplying the funds of a bank by means of a credit. The charge in the indictment concerning the delivery of the note relates to a mere matter of evidence. ' It is not connected with the charge or definition of the offense, and does not vitiate the indictment. 31 C. J. p. 664, § 181; 1 Wharton’s Criminal Law, p. 320; Bishop v. State, 118 Ga. 799, 45. S. E. 614; State v. Rowe, 104 Iowa, 323, 73 N. W. 833; United States v. Snyder (C. C.) 8 F. 804; State v. Williams, 20 S. D. 492, 107 N. W. 830.
We think the indictment against Cozad sufficient.
The order of the circuit court sustaining the demurrer is overruled.
Dissenting Opinion
(dissenting). ' Section 8991, Code 1919, upon which the 'indictment here is based, first appeared in our law as section 39 of article 2, chapter 222, Laws .1909, and was amended to its present form by section 43, art. 2, c. 102, Laws ,1915. The source statute is section 5209, Rev. St. U. S. (U. S. Comp. .§ 9772), relating to officers and employees of national banking associations, which is followed almost verbatim in our statute. The federal statute first appears as section 55, Act. of June 3, 1864, chapter 106 (13 Stat. L. 116), and has been frequently before the courts since that date, and- comes to us
In 'the instant case the indictment purports in general terms to charge “willful misapplication of the funds of the bank by use of a credit.” . The indictment cannot be sustained under the provision brought into the statute by the 1915 amendment as” an indictment for “wrongfully diverting to his own use, through the use of accommodation notes or credits^” because, there is no allegation in the indictment that the money in question was in fact diverted to the use of the officer Johnson. On the other hand, if the indictment in fact is sufficient to show “willfu'1 misapplication” under the statute, the indictment could' be ' in no- wise harmed by the fact that the means or method' by which such misapplication is charged to have been accomplished is by use of a credit.
The federal decisions on the proposition of “willful misapplication” under the federal statute from which our own was taken as hereinbefore indicated are voluminous, and on some points difficult to reconcile., and an examination of the cases lends sympathetic understanding to the frame of mind of the United -States district judge who.ended his opinion on demurrer to a 16-count indictment for “willful misapplication” in these words:
“It is much to be hoped that this decision will 'be reviewed. Anything more unsatisfactory than the ruling cases on ‘willful misapplication’ I have rarely met.” Hough, D. J., in United States v. Heinze ( C C.) 183 F. 907. See also United States v. Heinze (C. C.) 161 F. 425; United States v. Morse (C. C.) 161 F. 420; United States v. Heinze, 218 U. S. 532, 31 S. Ct. 98, 54 U ed. 1139, 21 Am. Cas. 884.
However, regardless of what conflicts, whether real or apparent, may appear in the federal decision- on some phases of this matter, I believe that they are entirely iniform on two propositions : First, that the words “willfully misapplied” have ns? settled technical meaning, and must be aided by averments showing how the misapplication was made, and that it was unlawful.
“The words ‘willfully misapplied’ are, so far as we know, i.ew in statutes creating offenses, and they are not used in describing- any offense at common law. Thev have no settled technical meaning like the word ‘embezzle’ as used in the statutes, or the words ‘steal, take and carry away,’ as used at common law. They do not, therefore of themselves fully and clearly set forth every element of the offense charged. It would not be sufficient simply to aver that the defendant ‘willfully misapplied’ the funds of the association. This is well setted by the authorities we have already cited. There must be averments we have already cited. There must be averments to show how the application was made and that it was an unlawful one.” United States v. Britton, 107 U. S. 665, 2 S. Ct. 512, 27 U ed. 520.
“By the settled rules of criminal pleading, and by the previous decisions of this court, the words ‘willfullv misapplies,’ have no settled technical meaning, (such as the word ‘embezzle’ has in the statutes, or the words ‘steal, take and carry away’ have at common law,) do not, of themselves, fully and clearly set forth every element necessary to constitute the offense intended to- be punished; but they must be supplemented by further averments, showing how the misapplication was made, and that it was an unlawful one. Without s-uch averments, there is no' sufficient description of the exact offense with which the defendant is charged, so as to enable him to defend himself against it, or to plead an acquittal or conviction in bar of a future prosecution, for the same cause. United States v. Britton, 107 U. S. 655, 661, 669 [2 S. Ct. 512, 27 L. Ed. 520]; United States v. Northway, 120 U. S. 327, 332, 334 [7 S. Ct. 580, 30 L. Ed. 664] ; Evans v. United Slates, 153 U. S. 584, 587, 588 [14 S. Ct. 934, 38 L. Ed. 830].
“The general allegation, at the beginning of the count in question, that the defendant, on January 1, 1891, and at divers times between that date and July 8, 1893, being president, director and agent of a certain national banking association,did, as such
To the same effect see Evans v. U. S 153 U. S. 584, 14 S. Ct. 934, 38 L. Ed. 830; Rieger v. U. S., 107 F. 916, 47 C. C. A. 61; Donegan v. U. S. (C. C. A.) 296 F. 843.
“The jury were instructed that the fact that Miller received credit in 'his account on the books of the bank for checks drawn on that bank or on other banks constituted a flagrant misapplication of the funds of the Commercial Bank, within the meaning <5f section 5209; yet it is apparent that merely giving credit to Miller on the hooks of the bank for the amount of the checks did not lessen the funds held by the bank, nor in fact defraud the association in any form. To complete a misapplication of the funds of the bank, it was necessary that some portion thereof should be withdrawn from the possession or control of the bank, or a conversion in some form should be made thereof, so that the bank would be deprived of the benefit thereof. It is not necessary in all cases that the money should be actually withdrawn from, the bank. Thus if, by connivance between a bank official and a customer of the! bank, the latter is allowed to draw checks on the bank, when the drawer has not the funds to meet the checks, and the same are' 'given by the drawer to third parties in payment of claims due them, and the third parties, instead of getting the cash on the checks, have been credited up to their accounts in the bank, this completes the misapplication of the funds of the bank, because the ■bank has become bound for the payment of the sums thus credited to the third parties, and the result is just the same as though the holders of the checks had obtained the money thereon, and had subsequently deposited it to their credit. In such cases the funds of the bank would be lessened, and thereby criminal misapplication might be completed. If, however, the customer presents the checks himself, and has the same crdited on his account, the crime of misapplication is not completed thereby, because the bank is*406 not under legal obligation to pay out any of the amounts wrongfully credited to the customer, and may refuse to pay checks dra-wn against the inflated account, and may at any time charge bade against the customer the amounts of the checks upon which nothing was in fact realized by the bank. To complete the criminal misapplication of the bank funds in the supposed case, some sum must be paid by the bank to the customer, or tO' third parties on his order, or must be credited to third parties under such circumstances that the bank becomes bound for the payment thereof.” Dow v. U. S., 82 F. 904, 27 C. C. A. 140.
To the same effect is U. S. v. Martindale (D. C.) 146 F. 280; Prettyman v. U. S., 180 F. 30, 103 C. C. A. 384; Coffin v. U. S., 156 U. S. 432, 15 S. Ct. 394; 39 L. Ed. 481; Coffin v. U. S., 162 U. S. 664, 16 S. Ct. 943, 40 L. Ed. 1109; McCallum v. U. S. 247 F. 27, 159 C. C. A. 245.
I believe these propositions to be sound in principle in addition to having the support of the authorities, and in the instant case it is not sufficient merely to allege that the officer, Johnson, with intent to injure and defraud the bank, did willfully, knowingly, unlawfully, and feloniously misapply by use of credit certairi moneys, funds, credits, and property of the said bank.
Turning then to the allegations and averments in support of the general claim of willful misapplication, the allegation is that Johnson, knowing a certain note was absolutely worthless, caused the bank to discount the same, and “that the proceeds of said note, the aforesaid sum of $6,500, was, under the direction of the said Frank H. Johnson, then and there, knowingly, willfully, and in fraud of the said Sioux Falls Trust & Savings Bank, applied to the use, benefit, and advantage of certain persons tO' the grand jurors unknown and not to the use, benefit, or advantage of the said bank.” Whether an offense has thus far been charged depends entirely upon what may be intended by the clause “the proceeds * * * was * * * then and there * * * applied to the use * * * of certain' persons.” This clause might well be construed to mean that the proceeds of the discounted note were paid in cash out of the bank funds to the certain persons unknown, and, if that was the fact, and was alleged to be the fact, then a misapplication would be alleged. That, however, is merely a possible construction of the word “applied,” and not the necsessary one. Fur
“And that thereafter the sum of $6,500 was, through the account of various persons to the grand jurors unknown, withdrawn, and was then and there wholly lost to the said Sioux Falls Trust & Savings Bank, and the money, funds, credits and property of the same were and are depleted in that ambunt.”
It is perfectly apparent that this portion of the indictment can in no wise aid or complete what has gone before, except upon the indulgence of at least three assumptions: First, that the words “applied to the use, benefit, and advantage of certain persons” heretofore noticed must necessarily mean “deposited in the said Sioux Falls bank to the credit of certain persons.” Second, that the phrase “various persons' to the grand jurors unknown” in the portion of the indictment last above quoted, necessarily refers solely to the same persons intended by the phrase “certain
Being of the opinion that the learned 1 rial judge rightly decided that respondent’s demurrer must he sustained, I must respectfully dissent from, the majority opinion in this case.
