Bates v. Dresser Dresser v. Bates Bates v. Dean Same v. Bunker
| Decision Date | 01 March 1920 |
| Docket Number | Nos. 155-158,s. 155-158 |
| Citation | 251 U.S. 524,64 L.Ed. 388,40 S.Ct. 247 |
| Parties | BATES v. DRESSER. DRESSER v. BATES. BATES v. DEAN et al. SAME v. BUNKER et al |
| Court | U.S. Supreme Court |
Messrs. Frank N. Nay and William A. Kneeland, both of Boston, Mass., for receiver.
Messrs. Robert G. Dodge and Robert M. Morse, both of Boston, Mass., for Dresser.
[Argument of Counsel from page 525 intentionally omitted] Messrs. Clarence Alfred Bunker and Albert E. Pillsbury, both of Boston, Mass., for Bunker and Hardy.
Mr. Albert E. Pillsbury, of Boston, Mass., for Dean and others.
This is a bill in equity brought by the receiver of a national bank to charge its former president and directors with the loss of a great part of its assets through the thefts of an employe of the bank while they were in power. The case was sent to a master who found for the defendants; but the District Court entered a decree against all of them. 229 Fed. 772. The Circuit Court of Appeals reversed this decree, dismissed the bill as against all except the administrator of Edwin Dresser, the president, cut down the amount with which he was charged1 and refused to add interest from the date of the decree of the District Court. Dresser v. Bates, 250 Fed. 525, 162 C. C. A. 541. Dresser's administrator and the receiver both appeal, the latter contending that the decree of the District Court should be affirmed with interest and costs.
The bank was a little bank at Cambridge with a capital of $100,000 and average deposits of somewhere about $300,000. It had a cashier, a bookkeeper, a teller and a messenger. Before and during the time of the losses Dresser was its president and executive officer, a large stockholder, with an inactive deposit of from $35,000 to $50,000. From July, 1903, to the end, Frank L. Earl was cashier. Coleman, who made the trouble, entered the service of the bank as messenger in September, 1903. In January, 1904, he was promoted to be bookkeeper, being then not quite eighteen but having studied bookkeeping. In the previous August an auditor employed on the retirement of a cashier had reported that the daily balance book was very much behind, that it was impossible to prove the deposits, and that a competent bookkeeper should be employed upon the work immediately. Coleman kept the deposit ledger and this was the work that fell into his hands. There was no cage in the bank, and in 1904 and 1905 there were some small shortages in the accounts of three successive tellers that were not accounted for, and the last of them, Cutting, was asked by Dresser to resign on that ground. Before doing so he told Dresser that someone had taken the money and that if he might be allowed to stay he would set a trap and catch the man, but Dresser did not care to do that and thought that there was nothing wrong. From Cutting's resignation on October 7, 1905, Coleman acted as paying and receiving teller, in addition to his other duty, until November, 1907. During this time there were no shortages disclosed in the teller's accounts. In May, 1906, Coleman took $2,000 cash from th vaults of the bank, but restored it the next morning. In November of the same year he began the thefts that come into question here. Perhaps in the beginning he took the money directly. But as he ceased to have charge of the cash in November, 1907, he invented another way. Having a small account at the bank, he would draw checks for the amount he wanted, exchange checks with a Boston broker, get cash for the broker's check, and, when his own check came to the bank through the clearing house, would abstract it from the envelope, enter the others on his book and conceal the difference by a charge to some other account or a false addition in the column of drafts or deposits in the depositors' ledger. He handed to the cashier only the slip from the clearing house that showed the totals. The cashier paid whatever appeared to be due and thus Coleman's checks were honored. So far as Coleman thought it necessary, in view of the absolute trust in him on the part of all concerned, he took care that his balances should agree with those in the cashier's book.
By May 1, 1907, Coleman had abstracted $17,000, concealing the fact by false additions in the column of total checks, and false balances in the deposit ledger. Then for the moment a safer concealment was effected by charging the whole to Dresser's account. Coleman adopted this method when a bank examiner was expected. Of course when the fraud was disguised by overcharging a depositor it could not be discovered except by calling in the passbooks, or taking all the deposit slips and comparing them with the depositors's ledger in detail. By November, 1907, the amount taken by Coleman was $30,100, and the charge on Dresser's account was $20,000. In 1908 the sum was raised from $33,000 to $49,671. In 1909 Coleman's activity began to increase. In January he took $6,829.26; in March, $10,833.73; in June, his previous stealings amounting to $83,390.94, he took $5,152.06; in July, $18,050; in August, $6,250; in September, $17,350; in October, $47,277.08; in November, $51,847; in December, $46,956.44; in January, 1910, $27,395.53; in February, $6,473.97; making a total of $310,143.02, when the bank closed on February 21, 1910. As a result of this the amount of the monthly deposits seemed to decline noticeably and the directors considered the matter in September, but concluded that the falling off was due in part to the springing up of rivals, whose deposits were increasing, but was parallel to a similar decrease in New York. An examination by a bank examiner in December, 1909, disclosed nothing wrong to him.
In this connection it should be mentioned that in the previous semi-annual examinations by national bank examiners nothing was discovered pointing to malfeasance. The cashier was honest and everybody believed that they could rely upon him, although in fact he relied too much upon Coleman, who also was unsuspected by all. If Earl had opened the envelopes from the clearing house, and had seen the checks, or had examined the deposit ledger with any care he would have found out what was going on. The scrutiny of anyone accustomed to such details would have discovered the false additions and other indicia of fraud that were on the face of the book. But it may...
To continue reading
Request your trial
-
Michelsen v. Penney
...benefit does not change the character of these losses. Nor do we feel we should apply the modification suggested in Bates v. Dresser, 251 U.S. 524, 40 S.Ct. 247, 64 L.Ed. 388, modifying 1 Cir., 250 F. 525, 552, that the circuit court of appeals upon substantially modifying the decree of the......
-
Cosmopolitan Trust Co. v. Mitchell
...224 U. S. 73, 32 Sup. Ct. 403, 56 L. Ed. 673;Bowerman v. Hammer, 250 U. S. 504, 39 Sup. Ct. 549, 63 L. Ed. 1113;Bates v. Dresser, 251 U. S. 524, 40 Sup. Ct. 247, 64 L. Ed. 388; Dovey v. Cory, [1901] A. C. 477; Trask v. Chase, 107 Me. 137, 144, 77 Atl. 698;Emerson v. Gaither, 103 Md. 564;1 L......
-
Cunningham v. Comm'r of Banks
...15 S. W. 448,24 Am. St. Rep. 625. It seems to have been assumed to be the law if not expressly so decided in Bates v. Dresser, 251 U. S. 524, 527, 40 Sup. Ct. 247, 64 L. Ed. 388. [25] The breach of duty was established in the absence of evidence that the bankrupt, being present at meetings,......
-
Omnibank of Mantee v. United Southern Bank
...665, 673 (10th Cir.1944). His faults so measured, the officer is accountable for the losses they cause. Bates v. Dresser, 251 U.S. 524, 531, 40 S.Ct. 247, 249, 64 L.Ed. 388, 395 (1920). A person charging an officer with breach of his duty of care has the burden of production and persuasion ......