United States v. John Corbett

• Decision Date: 06 December 1909
• Docket Number: No. 236,236
• Parties: UNITED STATES, Plff. in Err., v. JOHN A. CORBETT, Gideon E. Newman, and Leroy E. McGill
• Court: U.S. Supreme Court

215 U.S. 233

30 S.Ct. 81

54 L.Ed. 173

UNITED STATES, Plff. in Err.,

v JOHN A. CORBETT, Gideon E. Newman, and Leroy E. McGill.

No. 236.

Argued October 14, 1909.

Decided December 6, 1909.

Assistant Attorney General Fowler for plaintiff in error.

[Argument of Counsel from pages 233-235 intentionally omitted] Mr. T. J. Connor for defendants in error.

[Argument of Counsel from pages 235-236 intentionally omitted] Mr. Justice White delivered the opinion of the court:

The trial court quashed portions of each count of the indictment and sustained a demurrer to the remainder. This direct review is sought because of the contention that the rulings in question were based on a construction of Rev. Stat. § 5209, U. S. Comp. Stat. 1901, p. 3497.

Each of the six counts charged Corbett, one of the defendants, who was cashier of the Bank of Ladysmith, a national banking association, with making a false entry as to the condition of the bank in a report made to the Comptroller of the Currency. The charge was that the false entry was made with the intent to injure and defraud said association, and to deceive an agent appointed to examine the affairs of such association, to wit, the Comptroller of the Currency of the United States. Newman and McGill, the other defendants, who were directors and respectively president and vice president of the bank, were charged in each count with having with like intent aided, abetted, etc., Corbett in the making of the false entry. The motion to quash was directed against that portion of each count which charged that the alleged acts were done with intent to deceive an agent appointed to examine, etc. The demurrer challenged generally the sufficiency of the averments of each count.

It is insisted that there is no jurisdiction to review, because the decision below was not based upon the invalidity or construction of any statute. We think that, within the ruling in United States v. Keitel, 211 U. S. 370, 53 L. ed. 230, 29 Sup. Ct. Rep. 123, the construction of Rev. Stat. § 5209 was involved. The suggestion of want of jurisdiction is therefore without merit.

In disposing of the merits, we shall consider separately the rulings on the motion to quash and upon the demurrer.

1. The motion to quash.

The motion was sustained upon the theory that no offense was stated by the charge of making a false entry in the report to the Comptroller of the Currency, with the intent to deceive an agent appointed to examine the affairs of the bank, viz., the Comptroller of the Currency, because that official was not such an agent. While this was the only question actually decided, nevertheless the reasoning which led the court to the conclusion by it applied went further, and caused the court to declare that the statute, in the particular mentioned, was in effect inoperative. This because not alone was the intent to deceive the Comptroller of the Currency not embraced, but also the intent to deceive an agent appointed to examine was excluded so far as a report made to the Comptroller was concerned, as such agent would be required to examine the books and papers of the bank, and not a report made to the Comptroller.

We are thus called upon to construe Rev. Stat. § 5209. The material portion of that section is as follows:

'Every president, director, cashier, teller, clerk, or agent of any association . . . who makes any false entry in any book, report, or statement of the association, with intent . . . to injure or defraud the association, . . . or to deceive . . . any agent appointed to examine the affairs of any such association, and every person who with like intent aids or abets any officer, clerk, or agent in any violation of this section, shall be deemed guilty of a misdemeanor . . .'

Before analyzing its text, we briefly refer to authorities relied upon on one side or the other as affirming or denying the correctness of the construction affixed to the section by the court below.

In United States v. Bartow, 20 Blatchf. 349, 10 Fed. 874, Benedict, district judge, sustained a motion to quash certain counts of an indictment, which charged the making of a false entry in a report to the Comptroller of the Currency, with the intent to deceive that officer, and held in a brief opinion that the Comptroller was not an agent appointed to examine the affairs of a national banking association, within the meaning of the statute.

In Cochran v. United States, 157 U. S. 286, 39 L. ed. 704, 15 Sup. Ct. Rep. 628, which involved a review of convictions under indictments for making false entries in reports made to the Comptroller of the Currency, in violation of Rev. Stat. § 5209, passing on the objection that no one except he who verified reports made to the Comptroller could be convicted under the indictments, the court, among other things, said (p. 294):

'If the statements of Thomas be taken as true, he, although verifying the reports as cashier, could not be held criminally liable for their falsity, since he took and believed the statements of Cochran and Sayre as to the truth and correctness of such reports. If this be true, there was lacking on his part that intent to defraud the association, or to deceive the Comptroller of the Currency, which is made, by § 5209, a material element of the offense.'

On page 298 the court considered a refusal to give an instruction, which, in the course of defining a false entry, said:

'The intention to deceive is essential to constitute a violation of the statute, and you must be satisfied beyond a reasonable doubt from the evidence, first, that the defendants or one of them made a false entry in said report; and, second, that it was made with the intention of misleading or deceivng the Comptroller of the Currency, or some other person or persons alleged in the said indictment.'

It was held that the refused instruction was substantially embodied in the charge as given, wherein, among other things, the trial court siad:

'The intent must have been, as laid in the indictment, to mislead and deceive one of these parties, either some of the officers of the bank or the officer of the government appointed to examine into the affairs of the bank. . . . So that you must find not only the fact that there was an omission to make the proper entry, but that with it was an intent to conceal the fact from somebody who was concerned in the bank, or concerned in overseeing it, and supervising its operations and the conduct of its business.'

Since the decision of the Cochran Case, and without citing that case on that subject, in Clement v. United States, 149 Fed. 305 (79 C. C. A. 243), the circuit court of appeals for the eighth circuit, considering an objection that an allegation in a count was immaterial which charged that a false entry was made in a report to the Comptroller of the Currency, with intent to deceive that official and any agent who might be appointed to examine the affairs of a bank, said (p. 316):

'That is quite correct so far as the allegation concerning the intent to deceive the Comptroller is concerned. Such intent is not one of those requisite under § 5209 to constitute an offense. But the contention is not correct in so far as the allegation relates to the intent to deceive an agent who might be appointed to examine the affairs of the bank.'

Irrespective of the direct conflict between the statement just quoted and the reasoning of the court below in the case at bar, it is apparent that neither the Bartow nor the Clement Case, in view of the Cochran Case, can be considered as persuasive. The Cochran Case, however, it is urged should not be treated as authority, because it does not appear that any question was raised concerning the construction of the statute in the particular now controverted, but that the meaning of the statute was taken for granted, and hence the mere assumption which was indulged in deciding the Cochran Case should not now prevent a determination of the significance of the language of the statute. As the report of the Cochran Case indicates that the premise relied on is true, we come to consider the meaning of the section as an original question.

The report to the Comptroller, in which the entries were charged to have been false, and to have been made with the intent to deceive that officer as an agent appointed to examine, etc., was clearly one made under the provisions of Rev. Stat. § 5211, U. S. Comp. Stat. 1901, p. 3498, which reads as follows:

'Every association shall make to the Comptroller of the Currency not less than five reports during each year, according to the form which may be prescribed by him, verified by the oath or affirmation of the president or cashier of such association, and attested by the signature of at least...