Hobbins v. State

• Decision Date: 06 March 1934
• Citation: 214 Wis. 496,253 N.W. 570
• Parties: HOBBINS v. STATE.
• Court: Wisconsin Supreme Court

214 Wis. 496

253 N.W. 570

HOBBINS

v.STATE.

Supreme Court of Wisconsin.

March 6, 1934.

Error to the Circuit Court for Dane County; Edgar V. Werner, Circuit Judge.

W. J. Hobbins was convicted of causing false entries in the general ledger of a bank, of which he was president, with intent to deceive persons authorized to examine into its affairs and of concurring in the making and publishing of a false statement of such bank in a newspaper with intent to deceive members, shareholders, or creditors of the bank, and he brings error.--[By Editorial Staff.]

Reversed with direction to dismiss in part, and affirmed in part.La Follette, Rogers & Roberts and W. Wade Boardman, all of Madison, for plaintiff in error.

J. E. Finnegan, Atty. Gen., Fred Risser, Dist. Atty., of Madison, and E. C. Fiedler, Sp. Prosecutor, of Beloit, for the State.

FOWLER, Justice.

The defendant was convicted (I) of knowingly and willfully causing, while president of the Capital City Bank, a bank organized and existing under the laws of Wisconsin, false entries to be made in the general ledger of said bank in the account with the Marine National Bank, with intent to deceive “any person * * * authorized to examine into the affairs of said bank” contrary to section 221.17, Stats.; and (II) of knowingly and willfully concurring, while president of said bank, a corporation, in the making and publishing in the Capital Times, a newspaper, of a statement of said bank as of September 29, 1931, false in several designated particulars, with intent to deceive “any member, shareholder or creditor” of said corporation, contrary to section 343.37, Stats. The facts so far as essential to an understanding of the decision are stated in connection with the discussion of the several issues raised.

[1] 1. In connection with count I, the defendant contends that the evidence is insufficient to support conviction because it does not show that the defendant knowingly or willfully caused the false entries complained of to be made or that the entries were made with intent to deceive “any person authorized to examine into the affairs of the bank.” Intent to deceive is an essential element of the offense. If the proof is insufficient as to that element, the conviction cannot stand. In our view of the case we need only consider the contention relating to this intent.

[2] The Capital City Bank was a state depository. The state deposited therein the checks received in payment of automobile license fees. These checks were cleared through the Marine National Bank. Up to a stated period, February, 1924, the Marine National Bank cleared the checks without charge. It then notified the Capital City Bank that in the future it would charge 2 cents on each check. It thereafter each month mailed the Capital City Bank a statement showing the 2-cent charge and the amount to the Capital City Bank's credit on the basis of the deduction. The amount subject to check was plainly the amount thus shown. Notwithstanding this, the Capital City Bank in the account on its own books purporting to show the amount to its credit with the Marine National Bank failed to deduct the 2-cent charge which in the aggregate amounted to $13,437.60, and thus showed the credit balance greater than it in fact was. The balance shown on deposit with the Marine National Bank was entered on the Capital City Bank's ledger each day, and each balance entered was a false balance and a false entry.

The evidence shows that the account was so carried on its books by direction of the defendant. He expressly directed the Marine National Bank to continue clearing the checks after being informed that that bank would not clear them unless the charge were allowed, and stated that the amount would be allowed. The reason the balance was so carried on the Capital City Bank books was that the bank expected, or at least hoped, to get the state to allow it the 2-cent charge for clearing the checks. It was considered that such allowance could not be procured if the charge were inferentially admitted to be correct by entering credit therefor in the account kept by the Capital City Bank with the Marine National Bank on its own books. Allowance from the state was never procured. The Capital City Bank was closed and its affairs taken over by the commissioner of banking, and the false balance was carried on its books until the bank closed.

The statute upon which count I is based prohibits false entries with intent to deceive “any person authorized to examine into the affairs of the bank.” The persons referred to by the language quoted are the commissioner of banking and the examiners of his department.

We are clearly of opinion that any bank examiner examining the condition of the bank would necessarily discover the carrying of the false balance with the Marine National Bank. Statements were sent by the Marine National Bank monthly or oftener, each of which showed the charge for collecting checks and the balance to the credit of the Capital City Bank. These statements were kept in the files of the Capital City Bank. Besides reconciliation sheets were frequently sent by the Marine Bank, covering items of charge and credit other than the automobile license checks which were delayed in clearing or collection, and these were also on file. Examination of all state banks by examiners of the banking department between stated intervals is required by law. That examiners would discover and examine the statements and reconciliation sheets is manifest. That the defendant who directed and knew about the carrying of the false balance could have expected, or even hoped, that these statements and sheets would not be discovered, seems absurd. No effort to conceal them from the examiners is shown by the evidence. The examiners were given full explanation of the carrying of the false balances and the reason therefor, and they mentioned the matter in their reports. We are of opinion, therefore, that the judgment entered upon count I of the information must be reversed with directions to dismiss.

[3] 2. Section 221.15, Stats., requires that each state bank shall publish in a newspaper of the city, village, or county wherein it is located, at least three times in each year, reports in form as prescribed by the commissioner of banking. The printed statement involved under count II is a report of the Capital City Bank required by this section. It is dated October 8, 1931, and refers to the condition of the bank on September 29. Count II alleged that this report was to some extent false in practically every respect. We do not consider it necessary to mention each respect in which the statement is claimed by the state to be false, but will consider the following among the items of the bank's assets included in the report: Cash on hand and in reserve banks which included the $13,437.60 false balance in the Marine National Bank stated above; unpledged bonds reported as $381,653.04, whereas the unpledged bonds were only $38,454, and $356,699.04 of the bonds were pledged, the two making the total of bonds held; loans and discounts, among which were included notes signed by the defendant as trustee, one for $20,335, to cover its own stock illegally held by the bank, and another for $20,138, to cover stock of the Continental Illinois Bank & Trust Company wrongfully held; and overdrafts, which omitted a $4,512.46 overdraft of the King Street Security & Realty Company.

It is claimed that the evidence does not support conviction upon count II because it does not show (a) that the defendant knew of the false statements in the publication; (b) that the false statements were willfully concurred in by the defendant; (c) that the false statements were made with intent to deceive; and (d) that the defendant concurred in publishing the statement.

(a) The facts respecting the defendant's connection with the published report are as follows:

After this report had been prepared and taken to the newspaper for publication, a more detailed report required to be made to the banking commissioner covering the condition of the bank at the same time was prepared and presented to the defendant. The defendant insisted on seeing the published report, and it was shown to him. Both of these reports were sent to the banking commissioner, and the defendant insisted on seeing them both before they were sent. He did not ask that any corrections be made in either of them. He did not give instructions to make any statements that would not show the true condition of the bank. It does not appear that he ever examined the books of the bank himself. When he wanted information he asked for it. However, he knew how the books were kept. He had been a bookkeeper himself.

It must be conceded that there is little direct evidence of the defendant's connection with the publication. But he was president of the bank. He knew how the books were kept. He knew that the $13,437.60 item for clearing automobile license checks was included in the item of cash in reserve banks, and knew that that item as reported was false. He insisted on having the published statement brought to him. From this it is a fair inference that he read it and knew of its contents. He must have known--it is a fair inference that he did know--that the item of “unpledged bonds” was false. All but $38,454 of the bonds held by the bank, nearly 90 per cent., were pledged. The report states that all were unpledged; that none were pledged. Surely it is a fair inference--the jury might fairly and properly infer from this, were entirely warranted in inferring from this--that the defendant knew the report in this respect was false. The jury saw the defendant. He was president of the bank. He was drawing $10,000 a year salary for attending to the business of the bank. The matter of pledging 90 per cent., of pledging $356,699.04 of the bonds owned by the bank is of so great importance as to be naturally called to the attention and to...