Laws v. United States

• Decision Date: 01 September 1933
• Docket Number: No. 831.,831.
• Citation: 66 F.2d 870
• Parties: LAWS v. UNITED STATES.
• Court: U.S. Court of Appeals — Tenth Circuit

66 F.2d 870 (1933)

LAWS v. UNITED STATES.

No. 831.

Circuit Court of Appeals, Tenth Circuit.

August 4, 1933.

Rehearing Denied September 1, 1933.

Alger Melton, of Chickasha, Okl. (Adrian Melton and Clarence McElroy, both of Chickasha, Okl., on the brief), for appellant.

W. F. Rampendahl, U. S. Atty., of Muskogee, Okl.

Before PHILLIPS and McDERMOTT, Circuit Judges, and KENNEDY, District Judge.

PHILLIPS, Circuit Judge.

Laws was convicted on counts 3 to 8, inclusive, of an indictment charging violations of section 592, title 12, USCA, and sentenced to be imprisoned for one year and one day on each of such counts, the sentences to run concurrently, and to pay a fine of $500 on count 3.

Laws was cashier of the First National Bank of Blanchard, Oklahoma (hereinafter referred to as the bank), which was a member bank of the Federal Reserve Bank of Kansas City, Missouri. The Home State Life Insurance Company had a general deposit in the bank. Laws was the local agent for the Insurance Company. On March 27, 1930, Laws, without the authority of the Insurance Company, drew a check for $500 on the Insurance Company's account, signed, "Home State Life Insurance Co., by T. J. Laws," and deposited such check to the credit of the Blanchard Realty Company. Laws, under the name of the Realty Company, was also a depositor of the bank's, and his account was then overdrawn $17.42. Both the check and deposit ticket contained this notation: "Loan to assist in handling insurance notes."

Count 3 charged that Laws by such transactions misapplied $482.58 of the money, funds, and credits of the bank, with intent to injure and defraud the bank.

On June 14, 1930, Laws drew a check on the Realty Company's account in the bank and deposited it to the credit of the Insurance Company, and made a deposit ticket therefor. There was a notation on the check, "For Debt," and on the deposit ticket, "Blanchard Realty Co. T. J. L. (Check)."

On August 12, 1930, without the authority of the Insurance Company, Laws drew a check for $500 on the Insurance Company's account, payable to the Realty Company, and deposited it to the credit of the latter. The deposit ticket bore the notation, "Home State Life Ins. Co. Loan." The Realty Company's account was then overdrawn $330.52.

Count 4 charged that by the foregoing transactions, Laws misapplied $169.48 of the money, funds, and credits of the bank, with intent to injure and defraud the bank.

On November 1, 1930, Laws issued a check of the Realty Company for $500, and deposited it to the credit of the Insurance Company, and made a deposit ticket therefor. There was a notation on the check, "For Refund Loan," and on the deposit ticket, "Blanchard Realty Co."

On April 11, 1931, Laws, without authority of the Insurance Company, drew a check for $1700 on the account of the Insurance Company and deposited it to his account in the bank, and made a deposit ticket therefor. There was a notation on the check, "For Loan," and on the deposit ticket, "Home State Loan."

On April 11, 1931, Laws by check on his account in the bank paid the bank $1700 principal and $43.35 interest in satisfaction of his demand note to the bank dated November 8, 1930. This left a credit in his account of $12.94.

Count 5 charged that by the foregoing transaction Laws misapplied $1687.06 of the money, funds, and credits of the bank.

On April 23, 1931, Laws issued a check on his account for $1700 and deposited it to the credit of the Insurance Company.

The bookkeeper made entries of the checks and deposit tickets involved, including entries on the individual ledger sheets of the bank, in the usual and regular course of business. The deposit tickets were placed in the regular file and permanent records of the bank, and were accessible to the bank examiners and officers of the bank.

Count 6 charged that on March 28, 1930, Laws with intent to injure and defraud the bank, and to deceive the officers and directors of the bank, the Federal Reserve Bank of Kansas City, the Comptroller of the Currency, and the bank examiners, made a false entry in the individual ledger account of the Insurance Company by making, under the printed heading "New Balance," the entry: "March 28-30 — $2500"; whereas in truth and in fact the liability of the bank to the Insurance Company was then $3000.

Count seven charged a like false entry on August 12, 1930.

Count eight charged that on April 11, 1931, Laws, with a like intent as that charged in count 6, made a false entry in the individual ledger account of the Insurance Company by making, under the printed heading "New Balance," the entry: "April 11-31 — $165.40"; whereas in truth and in fact the liability of the bank to the Insurance Company was then $1865.40.

The evidence established the transactions alleged. The only controverted issue was that of intent. Laws testified that he intended, at the time he drew the checks on the Insurance Company's account, to return the funds to the Insurance Company; that he did not intend to injure or defraud the bank thereby; and that the credits transferred from the account of the Insurance Company to his account, went to pay his overdrafts and obligations to the bank.

He further testified that under his instructions the deposits and credits made in the account of the Insurance Company, as a result of the checks drawn by him thereon, and the deposits made by him therein, were not reflected in the statement of the Insurance Company's account furnished to it by the bank.

At the close of the evidence, counsel for Laws moved for an instructed verdict of not guilty as to counts 6, 7, and 8 on the ground that the entries correctly recorded actual transactions, and were not false entries within the meaning of the statute.

A portion of the Court's charge to the jury, which dealt particularly with the misapplication counts, is set out in Note¹ Requested instructions Nos. 1 and 4 are set out in Note².

I. In cases where a specific intent is an essential element of the offense charged, the presumption that a person is presumed to intend the necessary and natural consequences of his voluntary act is not a conclusive but a rebuttable presumption. McCallum v. United States (C. C. A. 8) 247 F. 27, 32, 33; Cummins v. United States (C. C. A. 8) 232 F. 844, 846; McKnight v. United States (C. C. A. 6) 115 F. 972.

Here, the intent, which is an element of the offense charged, is a specific rather than a general intent. Cummins v. United States, supra; Read v. United States (C. C. A. 8) 42 F.(2d) 636; Bishop v. United States (C. C. A. 8) 16 F.(2d) 410.

In the Cummins Case, the court said: "The law presumes that every person intends the natural consequences of his act knowingly committed, but in a case like this, in which a specific intent accompanying the act is a necessary element of the offense charged, the presumption is not conclusive, but is probatory in character. It is for the consideration of the jury in connection with the other evidence upon the subject."

In that portion of the charge set out in Note¹, the court instructed the jury that the intent to injure or defraud the bank is a general rather than a specific intent, and that the presumption, that a person intends the natural consequences of his wrongful act knowingly committed, is conclusive proof of intent to injure or defraud. This was error. It was prejudicial because there was other evidence tending to rebut such presumption, which it was the duty of the jury to consider, along with the presumption, in determining the issue of intent. It virtually withdrew from the consideration of the jury the sole defense interposed to the misapplication counts.

Requested instruction No. 1 correctly stated the law applicable to the instant case; it was predicated on a model instruction set out in the Cummins Case; it should have been given.

II. In that part of the charge set out in Note¹ the Court was dealing with the issue of intent to injure or defraud the bank in connection with the misapplication counts. The quoted portion is found in that part of the Court's instructions which has particular reference to the misapplication counts. It is limited to specific intent to injure or defraud, and makes no reference to a specific intent to deceive. Following the quoted portion of the charge, the Court took up and specifically dealt with the false entry counts. While these counts charge that the alleged false entries were made both with intent to injure and defraud the bank, and with intent to deceive the officers and directors of the bank, the Federal Reserve Bank of Kansas City, the Comptroller of the Currency, and the bank examiners, the Court, in charging upon these counts, eliminated the issue of intent to injure and defraud, and submitted to the jury only the issue of intent to deceive.

We therefore conclude that the erroneous instruction upon the question of intent to injure or defraud did not mislead the jury in its consideration of counts 6, 7, and 8, and did not prejudicially affect Law's rights with respect to those counts.

III. An entry which reflects an actual transaction exactly as it occurred is not a false entry. Note³. For example, where credit has been given by an officer of the bank to a third person, although such credit was not authorized and was a fraud on the bank, an entry accurately reflecting the credit given is not a false entry. Twining v. United States (C. C. A. 3) 141 F. 41; Dow v. United States (C. C. A. 8) 82 F. 904.

But the transaction to which the entry relates must be real and substantial, and not merely formal. Billingsley v. United States (C. C. A. 8) 178 F. 653, 663.

In the case last cited, the court said: "It cannot be the law that officers of a bank may make a sham entry with the intent to deceive, and yet, merely because they go through the idle and deceitful form of making a transaction to which the entry might nominally but cannot really relate, protect themselves from the...