McCallum v. United States

• Decision Date: 03 December 1917
• Docket Number: 4854.
• Citation: 247 F. 27
• Parties: McCALLUM v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

247 F. 27

McCALLUM v. UNITED STATES.

No. 4854.

United States Court of Appeals, Eighth Circuit.

December 3, 1917

Lewis Rhoton, Thomas E. Helm, Edward B. Buchanan, and Gardner K Oliphint, all of Little Rock, Ark., for plaintiff in error.

W. H Martin, U.S. Atty., of Hot Springs, Ark., and W. H. Rector Ass't U.S. Atty., of Little Rock, Ark.

Before SANBORN and CARLAND, Circuit Judges, and BOOTH, District Judge.

SANBORN Circuit Judge.

Thomas D. McCallum was indicted, tried, and convicted for misapplication of the moneys, funds, and credits of the Arkansas National Bank of Hot Springs, Ark., while he was assistant cashier, in violation of section 5209 of the Revised Statutes (section 9772, 9 U.S.Comp.Stat.Ann. 1916).

One of the charges of misapplication for which he was convicted was that on October 15, 1914, while he was assistant cashier and teller of the bank, he abstracted from its funds in his custody $110.80. Robert Neill, the cashier of the bank at the time of the trial, was called and examined by the United States to support this charge. On his direct examination he testified that the Arkansas bank kept an account with the National Bank of Commerce of St. Louis in August, September and October, 1914, on which it allowed the Arkansas bank interest at the rate of 2 per cent. per annum on daily balances; that the St. Louis bank credited the Arkansas bank in its August account $110.80 on account of this interest for that month, that in the ordinary course of business the St. Louis bank sent a statement of its account between the banks to the Arkansas bank about 10 days after the close of each month, that when such a statement was received by the Arkansas bank it would be first properly entered on its reconcilement book, a book kept to reconcile the accounts of its correspondents with those of the Arkansas bank, and then the proper entries would be made subsequently on the other books of the Arkansas bank; that this $110.80 was entered by McCallum on the reconcilement book, and that entry showed that the St. Louis bank had credited the Arkansas bank with this $110.80 interest, and that that interest was used as an exception in reconciling the account; that prior to this reconcilement the Arkansas bank had already charged the St. Louis bank on its ledger with this $110.80; that in the ordinary course of business this $110.80 would have been charged on the books of the Arkansas bank after the reconcilement to the St. Louis bank and credited to profit and loss; that it was charged in that way by direction of McCallum on October 15, 1914, but that it was not credited to profit and loss, or to interest account; and that at the close of business on October 15, 1914, the cash was short $5.53. In answer to questions of counsel for the government, the witness then testified in this way:

'Q. What would have been the result if the failure to credit that to profit and loss had been an inadvertence or mistake? What would have been the effect on the cash? A. The cash would have been over $110.80. * * * Q. How would it have been possible for his cash to have balanced there, unless he had abstracted $110.80 from the cash of the bank? A. It wouldn't occur, except, of course, there is a possibility of a corresponding error of some sort with somebody else.'

On cross-examination this witness testified that, when the statement of the August account was received from the St. Louis bank in September, an entry was made on the reconcilement book of the Arkansas bank which--

'shows interest $110.80, as an exception on the credit side. That is in the handwriting of Mr. McCallum. Q. Does it show a credit or a debit? A. It is on the credit side. It shows that we were credited in St. Louis with that amount. We was to add that to the balance our books showed on the 31st. Q. You had already charged it on the Arkansas National Bank's books, had you not? A. On the ledger, yes; but not on the reconcilement book. Q. Was it charged on the books? A. It was not, until the 15th of October. Q. But it was later put in the regular form on the books, wasn't it? A. It was charged to the National Bank of Commerce; it wasn't credited to interest account. Q. How was it credited? A. I haven't any idea. The Court: I understood him to say it was not credited; it was charged. A. There was no corresponding credit. Q. It was simply, then, a failure to put the credit on the books, wasn't it? A. It is equal to that; yes, sir. Q. Well, that is what it was, wasn't it? A. Yes.'

On redirect examination this colloquy was had:

'By District Attorney Martin: Q. You speak about that $110.80 being a mere matter of failure to credit it. Suppose it had been credited to profit and loss, that would have been a proper entry, would it not? A. Yes. Q. Then what would have been the result upon the cash? A. The cash would have balanced. Q. Failing to enter that there, what happened to the cash? A. In order for the cash to balance as close as it did, there must have been some money taken out. Q. You would (--) had to taken out a corresponding amount of money to (--) made the cash balance? A. Yes.

'By the Court: Q. Supposing I came in the bank and deposit $1,000, and I get it entered on my book, but on that evening there is no entry made on the books showing that I was credited with $1,000 and the cash balance, what became of that $1,000? A. It must have taken out of the cash. Q. In other words, it was embezzled or stolen; is that what it is? (Objected to by the defendant upon the ground of being incompetent, irrelevant, immaterial, and upon the further ground that the same was prejudicial to the defendant, which objection was by the court overruled, and the defendant excepted.) A. Yes; in your hypothetical case it certainly would be.'

This ruling of the trial court is assigned as error, and a careful consideration of all the evidence relative to this item of $110.80, and a comparison of it with the supposed case which the court presented, and by the testimony of the witness proved to constitute embezzlement, has convinced that it cannot be sustained. There was no evidence in this case that McCallum had deposited $110.80 in the bank, made no entry of it on the books of the bank, and that the cash balanced at the close of the day of the deposit, or of any facts at all similar to these. The sum of the evidence was that the St. Louis bank owed and had credited the Arkansas bank on August 31, 1914, $110.80 interest on deposit balances during August; that on receipt of the St. Louis bank's statement of account during the first half of September, McCallum entered that $110.80 on the reconcilement book of the Arkansas bank as an exception which showed a credit to the Arkansas bank of that amount with the St. Louis bank; that on October 15, 1914, he caused that $110.80 to be charged in the regular account books of the Arkansas bank against the St. Louis bank, but failed to credit it to profit and loss, or to interest account, as he should have done; that the effect of this failure to credit profit and loss necessarily was to make the cash balance on that night appear to be $110.80 over, but that balance was in fact $5.53 short; that this discrepancy might have resulted from the abstraction of the $110.80 from the bank by some one, or by a corresponding error in entries in the books regarding the accounts of others.

Upon this evidence and the fact that McCallum had access to the funds of the bank, and in the face of his testimony that he never abstracted this money, or any part of it, the United States convicted McCallum of the misapplication of this $110.80. But the indispensable basis of its case was that with the exception of the failure of McCallum to credit this $110.80 to profit and loss, or to interest account, the books of the bank were correct. The foundation of its case, without which it had no case, was that if that entry had been made or if in its absence McCallum had not abstracted the $110.80, the books were correct and would have balanced. It rested its whole case on the proposition that the books were correct...