Commonwealth v. Nichols
| Decision Date | 19 October 1926 |
| Citation | 257 Mass. 289,153 N.E. 787 |
| Parties | COMMONWEALTH v. NICHOLS. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Exceptions from Superior Court, Worcester County; E. B. Bishop, Judge.
Frederic C. Nichols was found guilty of willfully misapplying moneys, funds, credits, or other property of a bank, and he excepts. Exceptions overruled.C. B. Rugg, Asst. Dist. Atty., of Worcester, and H. W. Brown, Asst. Dist. Atty., of Whitinsville, for the Commonwealth.
G. S. Taft, of Worcester, for defendant.
The defendant was found guilty upon two counts of an indictment under St. 1922, c. 313, § 2 (G. L. c. 266, § 53a), which, in those counts, charged that he, being the treasurer of the Fitchburg Savings Bank, did on July 7, 1924, and on January 15, 1925, ‘willfully misapply moneys, funds, credits or other property’ of the bank ‘otherwise than as described in General Laws, chapter two hundred sixty-six, sections fifty-two and fifty-three.’ No motion for specifications was filed. No question of form is raised.
There is no dispute that in June of 1924 and January of 1925 the defendant was treasurer as alleged, nor that the jury could find the following facts:
The defendant, personally, owed to the Merchant's National Bank of Worcester $80,000 and desired to pay it when due on July 9. 1924. To raise the money, he arranged with Whitney and Mrs. Bullock. There was an established custom for the treasurer to make loans secured by collateral without first obtaining the approval of the board of investment, which, at its next regular meeting after the loan, would ratify his action. Acting as treasurer, before July 7, he arranged that the bank should loan Whitney $50,000 on Whitney's note for six months secured by good collateral and that Whitney should loan the $50,000 to him personally. On July 7, he gave to Whitney the bank's check on the Fitchburg Bank and Trust Company for $50,000. Thereupon he received, for the bank, Whitney's note for $50,000 with the collateral, and, for himself, by indorsement from Whitney, the check for $50,000, all of which he turned into the Fitchburg Savings Bank. He also arranged that Mrs. Bullock should borrow $37,000 from the savings bank on her note with good collateral. She was unable to deliver her note and the collateral before July 9; but on July 7 she gave to the defendant her check for $37,000 on a Boston banking institution, where, as both of them knew, her deposit subject to check was only about $1,700; this check he agreed was to be indorsed by him and turned over to the bank to be held by it until she should furnish her note and collateral on July 9. He indorsed and turned in this check, and thereupon the bank gave to the defendant its check signed by the assistant treasurer for $35,000, payable to the defendant, which he endorsed in blank and turned back to the bank. In addition, the bank made its check, signed by the assistant treasurer, for $15,000, payable to the Fitchburg Bank & Trust Company which was credited by the trust company to the defendant's account with it. The defendant gave his personal check on the trust company for $8,000 to the savings bank.
On July 8, the defendant sent by mail to the Merchants' National Bank at Worcester, in payment of the note due July 9, a check for $80,000, payable to its order, which was drawn on the Massachusetts Trust Company at Boston and was signed by the Fitchburg Savings Bank by the defendant as treasurer. The Merchants' National Bank received this check on July 8, and notified the defendant by telephone that it would not accept the check of the savings bank signed by him as treasurer in payment of his personal debt, but would accept the bank's check signed by the assistant treasurer. On July 8, the defendant, after this communication, took a check of the savings bank signed by the assistant treasurer and drawn to the order of the Leominster National Bank on the Massachusetts Trust Company at Boston for $80,000 to the Leominster National Bank at Leominster and there received for it the check of that bank dated July 9 to the order of the Merchants' National Bank for $80,000. This check he sent on July 8 to the Merchants' National Bank.
Both Whitney and Mrs. Bullock were of good financial responsibility. The notes which they gave to the Fitchburg Savings Bank were paid in due course. On July 9, Mrs. Bullock delivered her note for $37,000 with good collateral to the savings bank, and received her check for $37,000 which was marked ‘void.’ The loans were approved by the board of investment at its next regular meeting. The check first sent to Worcester was returned to the defendant by the Merchants' National Bank marked ‘void’ a few days after that bank had received the check of the Leominster National Bank, and it was accompanied by the note for $80,000, which was marked ‘paid.’
In the regular course of business, the checks drawn on the Massachusetts Trust Company would not be presented to it and paid before July 9. On July 9, the Fitchburg Savings Bank was in possession of funds furnished by the defendant sufficient to meet them. No loss to the savings bank resulted from the transaction.
In January of 1925 the defendant, as endorser, owed the estate of Henry McGrath a note for $50,000 made by Mrs. Bullock. On January 15, he sent in payment to Miss McGrath, the trustee of the estate, a check for $50,000 drawn by the Fitchburg Savings Bank on the Merchants' National Bank of Boston and signed by the defendant as treasurer. In ordinary course of business this check would be presented and paid at Boston on January 16. Before he sent the check, he arranged by telephone, and received the oral promise of Miss McGrath, that she would not deposit it before January 19. Also, before January 15, the defendant, in accord with the practice already referred to, arranged that the Fitchburg Savings Bank should loan to Cornelius Quinlan, Agnes N. Quinlan and Mrs. Bullock on their demand note, $65,000. The Quinlans, who owed the bank $15,000, had signed the note before January 15, but Mrs. Bullock was unable to execute it before January 20. On January 20, the note for $65,000 was signed by Mrs. Bullock and delivered to the bank which, on the same day, issued its check for $15,000. This check was used in the payment to the bank of the $15,000 indebtedness of the Quinlans. No other checks were issued in this transaction. On January 19, Miss McGrath deposited the check for $50,000. It was paid by the Merchants' National Bank on January 20.
The loan of $65,000 was ratified by the board of investment on January 26. Miss McGrath was financially responsible. The defendant knew that Miss McGrath deposited the estate's funds with the Fitchburg Bank & Trust Company, and that if she did not deposit it until the 19th in accord with her promise, the check could not reach Boston and be paid before January 20. He had reason to believe Mrs. Bullock would sign the note for $65,000 on January 20. That note was paid October 26, 1925. No loss resulted to the Fitchburg Savings Bank from the transaction.
The defendant testified that he did not willfully misapply any of the moneys, funds, credits, or other property of the Fitchburg Savings Bank. The defendant contends that on this evidence there has been no willful misapplication of the ‘moneys, funds, credits or other property’ of the bank, and that he was entitled to have the judge direct the entry of a verdict of not guilty. He contends that the judge erred in refusing to charge the jury in accord with his requests as follows:
‘As to the $37,000 transaction--
‘Even if the defendant drew a savings bank check for $80,000 upon a Boston bank and negotiated it before Mrs. Bullock's note and the collateral securing it had been put into the savings bank, still there would be no willful misapplication of the monies, funds, credits or other property of such Savings Bank within the meaning of G. L. c. 266, § 53a, provided the note and collateral of Mrs. Bullock did in fact get into the savings bank before the savings bank check had reached the Boston bank upon which it was drawn.
‘And provided further that the defendant when drawing and negotiating the savings bank check had reason to believe that in the ordinary course of business said savings bank check could not reach the Boston Bank upon which it was drawn, and be charged by that bank to the account of the savings bank until after Mrs. Bullock's note and collateral would get into the savings bank.
‘If the defendant had arranged with Mrs. Bullock prior to drawing and negotiating the savings bank check for $80,000 on July 8 to have her put her note secured by collateral into the savings bank July 9, and if he had reason to believe that that would be done, and if in fact it was done, and if he knew on July 8, when he drew the savings bank check and negotiated it, that said check would not in the ordinary course of business reach the Boston bank upon which it was drawn and be charged by that bank to the account of the savings bank before July 10, when in fact it did reach the Boston Bank and was charged to the account of the savings bank, then there would be no willful misapplication of the monies, funds, credits or other property of the Savings Bank within the meaning of G. L. c. 266, § 53a.’
‘As to the $50,000 transaction--
‘If the defendant, before mailing the check for $50,000 on January 15, 1925, to Miss McGrath, had arranged with the makers of the $65,000 note to have the note in the savings bank on January 20, and if he requested Miss McGrath, the payee of the check, to hold the check and not to deposit it until January 19, and if she promised so to do, and in fact she did not deposit said check until January 19, and if in fact said check was not charged to the account of the savings bank until January 20, and if in fact when it was so charged on January 20, said note was in fact in the savings bank, and if the defendant had reason to believe that in...
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