92 F.2d 634 (7th Cir. 1937), 6243-6245, Weir v. United States

Docket Nº:6243-6245, 6248-6250, 6252, 6253.
Citation:92 F.2d 634
Party Name:WEIR v. UNITED STATES. [*]
Case Date:October 21, 1937
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 634

92 F.2d 634 (7th Cir. 1937)




Nos. 6243-6245, 6248-6250, 6252, 6253.

United States Court of Appeals, Seventh Circuit.

October 21, 1937

Page 635

U. S. Lesh, James E. Lesh, George M. Barnard, and Raymond L. Walker, all of Indianapolis, Ind., and Charles D. Kelso, of New Albany, Ind., for appellants.

Val Nolan, U.S. Atty., and B. Howard Caughran, and Paul A. Pfister, Asst. U.S. Attys., of Indianapolis, Ind., for the United States.

Before SPARKS and MAJOR, Circuit Judges, and LINDLEY, District Judge.

LINDLEY, District Judge.

Appellants seek to reverse convictions upon pleas of guilty to various indictments charging violation of section 592, title 12, U.S.C.A., subsequent to August 23, 1935, by embezzling certain assets of three state banks, of which they were officers or directors, making false entries in the books and in reports of condition of the banks to the Federal Deposit Insurance Corporation, and conspiracy to violate the law. The indictments charged that each bank was a state 'nonmember bank' as defined by law, the deposits of which were insured, in accord with the federal law, in the Federal Deposit Insurance Corporation, organized under the laws of the United States, a part of the capital stock of which the United States owned. Appellants' demurrers were overruled. In turn, followed pleas of guilty, judgments of conviction, and the instant appeals.

Appellants contend that section 592 does not apply to offenses committed by officers of state banks which are not members of the Federal Reserve System even though the deposits are insured by the Federal Deposit Insurance Corporation; that if it is applicable to officers and directors of such banks, it is unconstitutional; that if the statute is applicable and Congress has power to enact it, it does not become effective as to nonmember state banks unless the state of Indiana authorizes such banks to insure their deposits under the federal law, and that such consent has not been given.

The pleas of guilty admitted all averments of fact and waived any defect in form of allegations. After such pleas the accused could not question any issue of fact or the propriety of its form of averment, People v. Brown, 140 Cal.App. 616, 36 P.2d 194; Miggins v. State, 170 Md. 454, 184 A. 911; Spoo v. State, 219 Wis. 285, 262 N.W. 696; Hudspeth v. State, 188 Ark. 323, 67 S.W.2d 191; and waives all defects not jurisdictional. Roberto v. U.S., 60 F.2d 774 (C.C.A. 7); Kachnic v. U.S., 52 F.2d 312, 79 A.L.R. 1366 (C.C.A. 9); Spirou v. U.S. 24 F.2d 796 (C.C.A. 2); Rice v. U.S. 30 F.2d 681 (C.C.A. 5); Hocking Valley R. Co. v. U.S., 210 F. 735 (C.C.A. 6). Consequently, by the pleas, appellants admitted that the banks in question were 'nonmember banks' but that they were insured, participating in the benefits created by the Congress under the Federal Deposit Insurance Corporation Act. The questions submitted, therefore, are wholly legal in character.

Section 592 provides that any officer, director, or agent of any insured bank, as defined in the act, who embezzles any of the assets of such bank or makes any false entry in any of its books or reports, with intent to defraud the Federal Reserve System or the insured bank, or any other company, body politic, corporation, the Federal Deposit Insurance Corporation, or any agent appointed to examine the affairs of such insured banks, and any officer or director who aids or abets such act, shall be punished. The section originally extended to officers of only such banks as were members of the Federal Reserve System, but was amended in 1935 to include the officers of an 'insured bank,' which, according to subsection (c)(8) of section 264 of the act, is any bank, the deposits of which are insured under the act. The United States is the owner of capital in the Insurance Corporation to the extent of $150,000,000.00. Section 264(d), title 12, U.S.C.A. A state 'nonmember bank,' is any state bank not a member of the Federal Reserve System. Section 264(c)(2), Subsection (f) of section 264 provides that every bank, not a member of the Federal Reserve System, which on June 30, 1935, was or thereafter became a member of the Temporary Federal Deposit Insurance Fund shall be and continue to be, without application or

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approval, an insured bank, subject to the provisions of the law. Subsection (f) further provides that upon application any state nonmember bank, upon examination by the corporation and approval by the board of directors, may become an insured bank. Under the averments of the indictments the banks mentioned therein must have complied with...

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