Golden v. United States, 6062.

• Decision Date: 18 June 1963
• Docket Number: No. 6062.,6062.
• Citation: 318 F.2d 357
• Parties: John F. GOLDEN, Jr., Defendant, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — First Circuit

318 F.2d 357 (1963)

John F. GOLDEN, Jr., Defendant, Appellant, v. UNITED STATES of America, Appellee.

No. 6062.

United States Court of Appeals First Circuit.

June 18, 1963.

James D. St. Clair, Boston, Mass., with whom Robert E. Fast, Boston, Mass., was on brief, for appellant.

Daniel B. Bickford, Asst. U. S. Atty., with whom W. Arthur Garrity, Jr., U. S. Atty., was on brief, for appellee.

Before HARTIGAN and ALDRICH, Circuit Judges, and GIGNOUX, District Judge.

GIGNOUX, District Judge.

This is an appeal from a judgment of the United States District Court for the District of Massachusetts. The defendant was convicted by a jury on all eight counts of an indictment charging him with willfully misapplying funds totaling $158,933.58 belonging to the Everett National Bank, of which he was president, in violation of 18 U.S.C. § 656.¹

Each count of the indictment contained three identical paragraphs. The first such paragraph alleged that the defendant was at all material times an agent and employee of the Everett National Bank, a Federal Reserve Bank with deposits insured by the Federal Deposit Insurance Corporation. The second paragraph alleged that on or about March 10, 1959 the defendant "as president and agent of said bank" received funds in the amount of $286,069.25 for deposit in the Bank to the account and benefit of the estate of Oliver G. Kelley. The third paragraph alleged that on or about March 10, 1959 the defendant "as president and agent of said bank" deposited said funds to the account of "John F. Golden, Jr., Escrow Agent." Each count then alleged that thereafter, on a specified date between May 18, 1959 and December 9, 1959, the defendant embezzled, abstracted, purloined and willfully misapplied funds belonging to said Bank and intrusted to its custody and care by the unauthorized withdrawal from the escrow account of a stated portion of the $286,069.25 and the purchase of stock or real estate in his own name or in the name of his nominee, all in violation of 18 U.S.C. § 656.

The essential facts from which the questions presented by the defendant on this appeal arise may be briefly stated.

The total of $158,933.58 alleged to have been embezzled by the defendant was part of the proceeds of certain insurance policies on the life of Anthony Romaine, an officer and employee of the O. G. Kelley Company. Mr. Romaine lived in Tennessee and managed the operations of that company in that state.

The insurance proceeds were received by Mrs. Charles J. Burke, Jr. in the form of six checks aggregating $286,069.23: three payable to the O. G. Kelley Company, two payable to the Resisto Pipe and Valve Company, and one payable to the A. T. Stearns Lumber Company.² Both of the last-named companies were corporate subsidiaries of the O. G. Kelley Company. The O. G. Kelley Company was a sole proprietorship and an asset of the estate of O. G. Kelley, who had died a resident of Newton, Massachusetts in February, 1955. Mr. Burke, his wife Ellen Burke, for whom he acted in all matters relating to the estate, and the Everett National Bank, of which the defendant was president, were co-administrators of the O. G. Kelley Estate by appointment of the Massachusetts Probate Court. Mr. Burke was also a director of each of the corporations. Ancillary administration had also been taken out in Tennessee to administer the assets of the estate in that state, which included the O. G. Kelley Company plant in Tennessee. Mr. Burke and Mr. James H. Epps, Jr. were the ancillary administrators appointed by the Tennessee court.

At a meeting on or about March 10, 1959 in the offices of the O. G. Kelley Company in Massachusetts, the insurance checks were turned over to the defendant by Mr. Burke. Present at the meeting were the defendant, representing the Bank, Mr. Burke, and Messrs. John N. Brady, William B. Pontefract, Richard L. Brickley and Arthur Johnson. Mr. Brady was an officer and general manager of the O. G. Kelley Company and a director of the two corporations. Mr. Pontefract was a director of the Bank and also a director of at least one of the two corporations. Mr. Brickley was the attorney for the O. G. Kelley Estate, and Mr. Johnson was the auditor of the O. G. Kelley Company.

Those present at the March 10, 1959 meeting were uncertain as to the status of the insurance proceeds and as to whether they should be accounted for as part of the Tennessee estate or of the estate in Massachusetts. All agreed that the checks should be turned over to the defendant, but should not be mingled with the general funds of the O. G. Kelley Estate until their status could be determined. The evidence was conflicting, however, as to the understanding concerning the capacity in which the checks were delivered to the defendant. Mr. Burke testified that he turned the checks over to the defendant as the representative of the Bank with the direction "that the Everett Bank would hold the proceeds for the O. G. Kelley Estate." The defendant testified that the funds were turned over to him in his individual capacity as escrow agent, to be invested in his discretion, and with the specific instruction to keep them separate from funds of the O. G. Kelley Estate "until such time as certain questions would be resolved."

As to the disposition of the funds, the defendant freely acknowledged that following the meeting of March 10, 1959 he deposited the checks in an escrow account at the Everett National Bank in the manner described in the indictment,³ and that thereafter he withdrew the amounts alleged, totaling $158,933.58, and made the purchases referred to in the indictment. The defendant consistently denied, however, that he had received the funds as an officer or agent of the Bank, or for the benefit of the Bank; that he had any intent to injure or defraud the Bank; and that the Bank lost any of the funds at any time.

The points raised by the defendant on this appeal all are based upon alleged errors in instructions given by the trial court arising out of the court's allegedly erroneous construction of 18 U.S.C. § 656. In brief summary, the defendant contends that the court, in its charge to the jury, erred in three respects: first, in charging that as a matter of law the funds in the escrow account belonged to the Bank, and in refusing to submit to the jury the question of whether such funds ever became Bank funds; second, in charging that the government need not prove any monetary loss to the Bank as a result of the defendant's conduct, and in refusing to give the contrary instructions requested by the defendant; and third, in charging that it was not necessary for the government to show a specific intent on the part of the defendant to injure or defraud the Bank, and in refusing to give the contrary instructions requested by the defendant.

At the outset, the government argues that the defendant may not raise the points he now asserts on appeal because he did not object to the charge or state his grounds for objection as required by Fed.R.Crim.P. 30. This contention is wholly without merit. The purpose of this requirement of Rule 30, as of the similar requirement of Fed.R. Civ.P. 51, is to bring to the attention of the trial court errors or omissions in its charge, so that they may be corrected before the case is submitted to the jury. 4 Barron, Federal Practice and Procedure § 2235 (Rules ed. 1951); cf. Broderick v. Harvey, 252 F.2d 274, 276-277 (1st Cir. 1958). A review of the record satisfies us that the defendant in this case did all that could reasonably be expected to make the court aware of his theory of the case and to preserve his rights with respect to the issues now before us. The requirements of Rule 30 were satisfied. United States v. Currens, 290 F.2d 751, 759 (3d Cir. 1961).

We also pass quickly over the defendant's contentions that the court erred in instructing the jury, in substance, that no loss to the Bank had to be shown and that no intent to injure or defraud the Bank was required for a conviction under Section 656. With respect to the first point, the court charged the jury:

"It should make no difference in your decision in this case whether the bank lost any money or not, or whether the estate lost any money or not. That is not the test. The test is whether or not the bank was defrauded of something, defrauded of its right to have custody of these funds, the right of the bank to make its own decisions as to how these funds were to be used, and to act under other regulations promulgated in protection of banking as such in the national field.

"So that I charge you as a matter of law that the fact that there may not have been a loss here, or may have been a profit, has nothing to do with whether or not this defendant violated the Act."⁴

We find no error in this instruction. It is well settled that a permanent loss to the Bank is not an element of the crime defined in 18 U.S.C. § 656, and that subsequent restoration of the funds has no bearing on the offense. Indeed, it is not necessary that the Bank have suffered any loss at all. Mulloney v. United States, 79 F.2d 566, 581 (1st Cir. 1935), cert. denied, 296 U.S. 658, 56 S.Ct. 383, 80 L.Ed. 468 (1936); Rakes v. United States, 169 F.2d 739, 743 (4th Cir. 1948), cert. denied, 335 U.S. 826, 69 S.Ct. 51, 93 L.Ed. 380 (1948).

As to the defendant's second point, both parties agree that an intent to injure or defraud the Bank is an element of the offense with which the defendant was charged, despite the omission of these words in the 1948 revision of Title 18. Seals v. United States, 221 F.2d 243, 245 (8th Cir. 1955). But we cannot agree with the defendant's interpretation of the court's charge as not requiring a finding of the requisite intent. The court charged:

"Now, the funds covered by the statute must have been entrusted to the bank, or to an agent of the bank. And in addition to these elements, misapplication of funds entrusted to the bank or its agent, to find the

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