Bishop v. United States

• Decision Date: 29 November 1926
• Docket Number: 7526,No. 7494,and 7527.,7494
• Citation: 16 F.2d 410
• Parties: BISHOP v. UNITED STATES (two cases). GATES v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

16 F.2d 410 (1926)

BISHOP v. UNITED STATES (two cases).

GATES v. UNITED STATES.

Nos. 7494, 7526, and 7527.

Circuit Court of Appeals, Eighth Circuit.

November 29, 1926.

Kenneth W. Robinson and Harry S. Silverstein, both of Denver, Colo. (Philip S. Van Cise, of Denver, Colo., on the brief), for plaintiff in error Will F. Bishop.

S. Harrison White, of Denver, Colo., for plaintiff in error Frank L. Bishop.

Horace N. Hawkins, of Denver, Colo., for plaintiff in error Gates.

Ivor O. Wingren, Asst. U. S. Atty., of Denver, Colo. (George Stephan, U. S. Atty., of Denver, Colo., on the brief), for the United States.

Before KENYON, Circuit Judge, and SCOTT and JOHN B. SANBORN, District Judges.

KENYON, Circuit Judge.

Plaintiffs in error were tried in the United States District Court for the District of Colorado upon an indictment charging in eight counts the violation of section 5209, Rev. Stat. of the United States (Comp. Stat. § 9772), by the misapplication of funds of the Globe National Bank of Denver. The first count related to the payment of taxes of certain customers of the Home Insurance & Investment Company of Denver, and the other seven counts related to the payment by the Globe National Bank, (hereafter referred to as the Globe Bank) of overdrafts of the same company upon checks drawn to various insurance companies to cover premiums collected by said Home Insurance & Investment Company (hereafter designated as the Investment Company.) Plaintiffs in error for convenience will be designated as defendants. Defendants Frank L. Bishop and Will F. Bishop were convicted on all eight counts. Defendant Herman B. Gates was convicted on the first count and acquitted on the others. One Daniel H. Staley was also a defendant, but was acquitted by direction of the court. Defendant Frank L. Bishop was sentenced to 20 years in the penitentiary at Leavenworth, Kan., on the first four counts, and 20 years on the remaining counts, the sentences upon the last four counts to run concurrently with the first four. The defendant Will F. Bishop was sentenced to 17 years in the penitentiary, and the defendant Herman B. Gates to 9 months in the county jail. Fines were imposed of $8,000 as to Frank L. Bishop and $4,000 as to Herman B. Gates.

Prior to the commencement, but on the day the case was reached for trial, defendants filed an affidavit under section 21 of the Judicial Code (Comp. St. § 988), setting forth that the judge before whom the action was to be tried had a personal bias or prejudice against them. The court overruled the application for another judge to try the case, and this is assigned as error. The affidavit of disqualification under the statute was not filed until the morning of the day the case was reached for trial, viz. March 23, 1926, which was after the date the case was set for trial. Immediately after the court's ruling thereon defendants filed a motion for continuance. A large number of witnesses had been subpœnaed by the government and were present for the trial. The reasons set forth in the affidavit as the basis of the complaint as to prejudice were known to the defendants for a long time prior to the date set for trial, except one, which came to their knowledge on the 19th day of March, 1926. The statute provides for filing the affidavit as to prejudice 10 days prior to the beginning of the term. This could not be done in this case, as the case was set for trial at the same term at which the indictment was returned. Three days before the trial, to wit, March 19th, the matter which finally determined counsel to file the affidavit came to their attention. The case was reached for trial March 23d.

It is the intent of the statute that the affidavit must be filed in time to protect the government from useless costs, and protect the court in the disarrangement of its calendar, and prevent useless delay of trials, and parties filing such affidavits should be held to strict diligence in presenting the claims of disqualification. There is no reason why this affidavit could not have been filed previous to the morning of trial, and at a time when the facts upon which it was to be based were fully known to defendants' counsel. Of course, if the facts were not known until the day of trial, it would then be in time; but where it clearly appears that practically all of them were known long prior thereto, and within ample time to have filed the affidavit before the day of trial, a party, by waiting until the day of the trial, evidences that the purpose of filing the same is delay. The spirit of the statute is thereby violated, and parties should not be permitted to reap therefrom the advantage of delay in trial. A new means of securing continuances would result from a holding that such affidavits of prejudice, where the facts are known long before, may be held until the last moment before trial and then filed.

This court has had occasion quite recently to consider this statute in two cases, viz. Heber Nations v. United States of America, 14 F.(2d) 507, and Lewis v. United States (C. C. A.) 14 F.(2d) 369. In the former case the question of the affidavit being filed in proper time did not arise. It was not filed 10 days before the beginning of the term of court, but good cause was shown for the failure so to do. The court there says: "Delay of the trial was not involved, for the trial was postponed by the court of its own motion for more than 30 days after the filing of the affidavit." In the case of Lewis v. United States the question of whether the affidavit was filed in time was not involved.

We think the expression of the court in Chafin v. United States (4th Circuit) 5 F. (2d) 592, 595, clearly states the reasonable construction of the statute: "The fair and reasonable construction of the statute is that, when the indictment is found 10 days or more before the term begins at which the case is to be called for trial, the affidavit must be filed 10 days before the beginning of the term, or good cause shown for the delay; when the indictment is found less than 10 days before such term begins, the affidavit must be filed as soon as practicable before the term begins, or good cause shown for the delay; when the indictment is found after the term has begun, the affidavit must be filed as soon as the disqualifying facts are known, or good cause shown for delay." Every case is governed to a large extent by the particular facts thereof. A defendant should not be compelled to try his case before a judge who has expressed prejudice against him. On the other hand, every consideration of fair dealing with the court requires that parties complaining of the prejudice must not make the statute a mere instrumentality for delay. That was not the purpose of its enactment. We are satisfied that under the facts of this record defendants waived the right of procedure conferred by section 21 of the Judicial Code.

The indictment was based upon section 5209, Rev. Stat., which covers the willful misapplication of the funds of a bank which is a member of the Federal Reserve system with intent to injure or defraud such bank. Under this section two elements must combine to constitute the crimes charged in the indictment: (1) A misapplication of the funds of the bank; (2) a willful and felonious intent to, by such misapplication, defraud the bank. It is defendants' theory that the taxes paid, which are complained of in the first count, and the checks drawn by the Investment Company to the insurance companies and paid by the Globe Bank, of which defendants were officers, complained of in counts 2 to 8, inclusive, were in fact obligations that the bank was liable for; that consequently the payment of these various obligations could not constitute misapplication of funds; and that there could be no wrongful intent in so doing, and therefore that no crime was committed thereby. The defendants asked certain instructions on this theory of the case. They were not given. Defendants, of course, had the right to have their theory of defense fully presented. A failure so to do would constitute error. We do not, however, enter into this phase of the case, as, from a careful study of this record and a thoughtful consideration of every phase of the testimony, we feel compelled to face the question as to whether or not the court erred in not sustaining the motions made by all of the defendants at the close of the evidence to instruct a verdict of "not guilty." This requires a complete review of the testimony.

In 1910 the Home Savings & Trust Company of Denver was organized, largely through the instrumentality of defendant Frank L. Bishop. Prior to that time said Frank L. Bishop had been in the insurance and loan business. After the organization of the Home Savings & Trust Company, this insurance and loan business was carried on as a branch of the bank's business, known as its "Insurance Department," handling the insurance business and real estate loans for clients. In 1923 the Home Savings & Trust Company merged with the Merchants' Bank of Denver and became the Home Savings & Merchants' Bank (hereafter designated the Home Bank). The insurance department continued as a branch of the bank. In 1924 this insurance department of the bank was incorporated under the name of the Home Insurance & Investment Company. This new company carried on the insurance business on the same floor as the bank and in the same manner as it had been carried on before its organization. It paid rent to the bank, apparently as a matter of bookkeeping, as it had been paid before, when the insurance business was concededly a mere branch of the bank.

The witness Mrs. Minty, who had been connected with the various insurance departments of the bank prior to the incorporation of the Investment Company and also thereafter, testified that the insurance department paid taxes really chargeable to the bank and that there was a substantial credit on the books of the insurance department...