Cooper v. United States

• Decision Date: 13 April 1926
• Docket Number: No. 2368.,2368.
• Citation: 13 F.2d 16
• Parties: COOPER v. UNITED STATES.
• Court: U.S. Court of Appeals — Fourth Circuit

13 F.2d 16 (1926)

COOPER v. UNITED STATES.

No. 2368.

Circuit Court of Appeals, Fourth Circuit.

April 13, 1926.

Before WADDILL, Circuit Judge, and WATKINS and GRONER, District Judges.

R. C. Lawrence, of Lumberton, N. C., and Charles A. Douglas, of Washington, D. C., for plaintiff in error.

Irvin B. Tucker, U. S. Atty., of Whiteville, N. C.

GRONER, District Judge.

William B. Cooper and his brother, Thomas E. Cooper, were jointly indicted for misapplying the funds of, and making false entries in the books of, the Commercial National Bank of Wilmington, N. C., in violation of section 5209, R. S., as amended by Act Sept. 26, 1918 (Comp. St. Ann. Supp. 1919, § 9772). The trial resulted in a verdict of guilty as to both defendants. William B. Cooper alone appealed.

The Commercial National Bank was the successor of the American Bank & Trust Company, a state bank organized under the laws of North Carolina. Thomas E. Cooper had been president of the state bank for several years. He decided to remove from Wilmington to Raleigh, N. C., to accept the presidency of a bank at that place, and, upon his resignation as president, he was succeeded by his brother, William B. Cooper. Shortly after his election as president, William B. Cooper, who will be hereinafter spoken of as defendant, ascertained as the result of several examinations of the bank that its condition was far from satisfactory, and presumably concluded that the best chance at rehabilitation lay in converting it into a national bank. This was accomplished on April 19, 1922, and about June 1st of the same year defendant sold his interest in the bank, resigned as president, and his place was filled by the election of his brother, Thomas E. Cooper, who returned from Raleigh and continued as such until December 30, 1922, when the bank was closed by order of the Comptroller and a receiver appointed to liquidate its affairs.

The indictment upon which the defendant and his brother, Thomas E. Cooper, were brought to trial originally contained thirteen counts. At the trial, before the case went to the jury, all counts in the indictment were nolle prossed except counts 1, 2, 3, and 7. The first three of these counts arose out of a single transaction, to wit, the discounting on April 27, 1922, of a note of E. L. Sanderson, indorsed by Thomas E. Cooper, for $13,500, and the entry of that amount on the books of the bank as a credit to Thomas E. Cooper. The seventh and last count submitted to the jury arose out of the discounting on July 6, 1922, of a note of E. E. Smith for $13,000, which, together with $500 in cash, was used to take up the Sanderson note. Misapplication is charged in the first count because of the discount of the note. The false entries charged in the second and third counts are: The entry of the proceeds of the note as a deposit to Thomas E. Cooper, in the one case, when as a matter of fact Cooper had made no deposit; and the entry of the note as a loan to E. L. Sanderson in the other, when as a matter of fact Sanderson was only an accommodation maker and the loan was really to Thomas E. Cooper. The false entry in the seventh count was the making of an entry on the books of the bank showing the discount of a note for the account of E. E. Smith, when in fact the relations of Smith and Cooper were the same as in the case of Sanderson and Cooper as charged in count 3.

In March, 1922, and while the defendant was president of the bank, Thomas E. Cooper, who was then indebted to the bank in a very considerable sum of money, obtained from one E. L. Sanderson his accommodation note for $13,500, which he (Cooper) sent to the bank with a personal guaranty of payment and asked to have discounted and placed to his credit. Sanderson, at the time he made the note, was cashier of a small North Carolina bank, and admittedly without financial responsibility. The cashier of the bank, one Bethea, discussed with defendant on several occasions the desirability of discounting the note, and the conclusion arrived at was that the note should not be discounted, and this conclusion was communicated to Thomas E. Cooper by letter from defendant, dated April 1st, as follows:

"Dear Tom: I am enclosing note signed by E. L. Sanderson $13,500 maturing January 15, 1923, for the reason that after fully considering this matter Mr. Bethea and myself are of the opinion that since we both know that Sanderson's signature is merely as a friend to you and since Sanderson could prove that in case of your death, even by Bethea or myself, that it would be a dangerous proposition to accept the note and on reflection I believe you will agree with us," etc.

Notwithstanding the refusal to discount the note, Thomas E. Cooper persevered in his efforts to have the matter reconsidered, and finally, on April 27th, the note indorsed by him was discounted and the proceeds, amounting to $12,905.55, placed to his credit on the books of the bank. The question whether the defendant authorized the discount of the note or whether it was done by the cashier, without his knowledge or consent, is a matter which defendant claims should have been submitted to the jury more fully than was done in the charge of the court to the jury. In view of what we will have to say hereafter, we do not regard it as necessary to discuss this assignment further than to say we think it is without merit.

In his charge to the jury, the learned judge presiding in the trial court told the jury, if they believed beyond a reasonable doubt "that the defendant W. B. Cooper did authorize the discount of this (Sanderson) note, you would be fully justified, in view of his clear understanding of the transaction expressed in his letter of April 1st (just hereinbefore quoted) in finding him guilty on the first, second, and third counts."

The issue which the jury were thus called on to decide was, as to the first three counts, narrowed to the single question whether the discount of the Sanderson note was authorized by defendant, and they were explicitly told that, if their answer to this query were in the...