United States v. Britton. statute. It is perfectly apparent that any false entry in any account book of a bank used in transacting its banking business is calculated to deceive. The fact that its falsity may be exposed by an examination of other books of account, does not render it any the less a false entry made with intent to deceive. The circumstance that the attempt to deceive by making a false entry was not an adroit and skillful one, does not relieve the act of its criminal character. It is further contended that the counts under consideration are insufficient, because it is not alleged that at the time the false entries were made, an agent had been appointed to examine the affairs of the association. This objection is based on the theory that the statute was designed to punish only those officers of a banking association who made false entries in its books with intent to deceive examiners appointed before the false entries were made. We do not think the statute will bear this construction. The appointment of agents to examine the affairs of National banking associations is provided for by section 5240 of the Revised Statutes, which declares: "The Comptroller of the Currency, with the approval of the Secretary of the Treasury, shall, as often as shall be deemed necessary or proper, appoint a suitable person or persons to make an examination of the affairs of every banking association, who shall have power to make a thorough examination into all the affairs of the association." It appears from this section that the appointment of these agents is not permanent, but occasional and temporary, and that the appointments are made as often as shall be deemed necessary and proper. It is therefore apparent that the statute which punishes false entries, made with intent to deceive such agents, refers to any entries made with that intent, whether before or after the appointment of the agent. There is nothing impossible in the averment that false entries have been made with intent to deceive an agent to be appointed after they are made. The agents are often purposely appointed without notice to the association. The fact that the Comptroller of the Currency has information that the officers of an association are making false entries in its books may be the occasion for appointing an agent to examine its affairs. To hold that the officers of United States v. Britton. the association would only be punishable for false entries made after an agent had been appointed, would rob the law of a large part of its salutary effect. Its purpose is clear to punish all false entries in the books of the bank, no matter when made, if made with intent to defraud the association or deceive the examiner. We think that in respect to the point under consideration the indictment is sufficient. We are of opinion that none of the objections raised to the first thirty-five counts are well taken. They are refined and unsubstantial, and not sustained by the rules of criminal pleading in cases of misdemeanor, or by the fair construction of the statute on which the indictment is based. These counts embody the language of the statute; they charge every element of the offense created by the statute with sufficient certainty, and give the defendant clear notice of the charge he is called on to defend. They are therefore sufficient. U. S. v. Cook, 17 Wall. 168, and cases already cited. The thirty-sixth count differs from the first thirty-five in charging the intent with which the offense was committed. The intent is charged to be "to injure and defraud the said association, and certain persons to the grand jurors unknown." This follows the language of the statute. Clearly it is possible to injure and defraud the association or its stockholders or other persons by false entries in its account of profit and loss. The charge is not repugnant or impossible. We are of opinion therefore that the first thirty-six counts of the indictment, being those which charge false entries in the books of the association, sufficiently state an offense under section 5209. It follows that count one hundred and seventeen, which is in all respects similar to count one, and count one hundred and eighteen, which is in all respects similar to count sixty-six, are good and sufficient. We shall next consider count numbered seventy-seven and the similar counts. That portion of the section on which they are based makes it, an offense for the president or other officer of a banking association to embezzle, abstract or willfully misapply the moneys of the association with intent to injure or defraud the association, or any company or person. United States v. Britton. The seventy-seventh count of the indictment charged that the defendant being president of the association, paid to a certain person unknown the sum of $2,400 of the moneys of the association in the purchase of forty shares of its capital stock, which stock, so purchased, was held by the defendant in trust for the use of the association, and the same was not purchased to prevent loss on any debt theretofore contracted with the association in good faith, and that so the defendant did willfully misapply the moneys of the association with intent to injure and defraud the association and certain persons to the grand jurors unknown. The question is propounded to us whether this count sufficiently describes an offense under section 5209 of the Revised Statutes. The purchase of its own stock by the association, except to secure a debt due it, is forbidden by law. Is a purchase for the use of a banking association of its own stock by its president, when not necessary to secure a debt due the association, a willful misapplication of its funds, punishable by section 5209? We think the willful misapplication, made an offense by this statute, means a misapplication for the use, benefit or gain of the party charged, or of some company or person other than the association. Therefore, to constitute the offense of willful misapplication, there must be a conversion to his own use or the use of some one else of the moneys and funds of the association by the party charged. This essential element of the offense is not averred in the counts under consideration, but is negatived by the averment that the shares purchased by the defendant were held by him in trust for the use of the association, and there is no averment of a conversion by the defendant to his own use or the use of any other person of the funds used in the purchase of the shares. The counts therefore charge maladministration of the affairs of the bank, rather than criminal misapplication of its funds. If we hold these counts to be good, then every official act of any officer, clerk or agent of a banking association, by which its funds are applied in a way not authorized by law, would be punishable under section 5209. For instance, section 5200 of the Revised Statutes declares that "the total liabilities to any association of any person * * * for money borrowed shall at no time exceed one-tenth * * * United States v. Britton. part of the capital stock of the association actually paid in." Section 5201 provides that no association shall make any loan or discount on the security of the shares of its own capital stock, unless such security shall be necessary to prevent loss on a previously contracted debt. If the counts under consideration are sustained, then every president, director, cashier, teller, clerk or agent of a banking association, who has any part in lending the money of the association contrary to the provisions of these sections, is guilty of a criminal misapplication of its funds. So, by section 5137 of the Revised Statutes, the purposes for which a banking association may purchase and hold real estate are limited, and specifically pointed out. If the directors of a banking association should authorize the purchase of a piece of real estate for its use, but not for purposes authorized by the statute, even though with intent to injure some corporate body or natural person, it could hardly be claimed that the directors who made the order, and the other officers or agents of the association who, with a like intent, had any hand in making the purchase or in paying out the money of the bank therefor, would be liable to indictment and imprisonment under section 5209. The act charged by the counts under consideration are precisely of the same character as those just mentioned. They are acts of maladministration of the affairs of the association by its officers. The penalty for such acts is prescribed by section 5239, which declares: "If the directors of any National banking association shall knowingly vio late, or knowingly permit any of the officers, agents or servants of the association to violate any of the provisions of this title ("National Banks "), all the rights, privileges and franchises of the association shall be hereby forfeited. * And in case of such violation, every director who participated in or assented to the same shall be held liable in his personal and individual capacity for all damages which the association, its shareholders, or any other person shall have sustained in consequence of such violation." * * We are therefore of opinion that the willful misapplication of the moneys and funds of the banking association, which is made an offense by section 5209, means something different from the acts of official maladministration referred to in section 5239, and it must be a willful misapplication for the use or benefit of the party charged, or of some person or company other than the as United States v. Britton. sociation, with intent to injure and defraud the association or some other body corporate, or some natural person. As the counts under consideration, namely, count seventy-seven, and the similar counts down to and including count ninety-six, do not show that the willful misapplication therein alleged was made by the defendant for his own use, benefit or advantage, but for the use of the association, we are of the opinion that they do not allege an offense under section 5209, and are therefore insufficient and bad. The counts are in our opinion, bad also for repugnancy. They aver that the defendant purchased the shares of the association and held them in trust for the association. This charge, without further averments, is clearly repuguant. It is true that it is possible for an officer of a banking association, with intent to defraud it, to misappropriate its funds in the purchase for its use of its own stock. But the count which avers such an act should also make other averments to show that the application was not merely a use of the money for the benefit of the association forbidden by law, but a criminal misapplication, by which it was possible that the association could be defrauded. For the reasons assigned, the counts next following, numbered from ninety-seven to one hundred and sixteen, inclusive, which are similar to count seventy-seven, except that they severally fail to aver that the act therein charged was done with intent to injure and defraud, must be held to be insufficient. The counts last mentioned, as well as the counts numbered from fifty-six to seventy-six, inclusive, are bad for the further reason that they fail to aver any intent to injure and defraud mentioned in section 5209. The intent to injure and defraud is an essential ingredient to every offense specified in the section, and the failure to aver the intent is a fatal defect in the counts in which it occurs. We shall next consider count numbered thirty-seven, and the counts which are similar to it. These counts simply charge that the defendant being president of the association, willfully misapplied its moneys and funds by buying therewith certain shares of its stock, with intent to injure and defraud the association and certain persons to the grand jurors unknown. The words "willfully misapplied" are, so far as we know, new in statutes creating offenses, and they are not used in describing VOL. III-12 |