Morrissey v. United States, 7070.

• Decision Date: 20 October 1933
• Docket Number: No. 7070.,7070.
• Citation: 67 F.2d 267
• Parties: MORRISSEY v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

67 F.2d 267 (1933)

MORRISSEY v. UNITED STATES.

No. 7070.

Circuit Court of Appeals, Ninth Circuit.

October 20, 1933.

David H. Cannon and Byron C. Hanna, both of Los Angeles, Cal., for appellant.

Peirson M. Hall, U. S. Atty., and John R. Layng, Asst. U. S. Atty., both of Los Angeles, Cal.

Before WILBUR, SAWTELLE, and GARRECHT, Circuit Judges.

WILBUR, Circuit Judge.

The appellant, president of the Pacific National Bank of Los Angeles, Cal., a member bank of the Federal Reserve Banking System of the United States, was indicted, together with Anthony F. Swenson, executive vice president, Frank W. Shelton, assistant vice president, and Robert G. Johnston, cashier, of said bank, upon thirty-seven counts charging various violations of section 5209 of the Revised Statutes of the United States (12 USCA § 592). Arthur P. Adkisson and James M. O'Brien were charged as aiders and abettors. The first thirty-six counts charged substantive offenses under the statute and the thirty-seventh charged a conspiracy to violate the provisions of section 5209, R. S., by "misapplying and causing to be misapplied the moneys, funds and credits of said member bank, to the extent of about $528,000." In the conspiracy count the first thirty-six counts are referred to as overt acts, and in addition thereto sixteen overt acts are specified. All the defendants, except appellant, were acquitted of all charges, and the appellant was acquitted of all charges except the first seventeen counts. These counts charged the willful misapplication of the moneys, funds, and credits of the bank, "with intent to injure and defraud said member bank and divers other persons and corporations," by issuing certain cashier's checks aggregating $582,543.73. The appellant was sentenced to one year and one day on each of the seventeen counts upon which he was convicted. The sentence on counts 1 to 10 were to run consecutively, and from 11 to 17 to run concurrently with the sentence on count 1.

Before the consideration of the case, it should be stated that the appellee objects to the consideration of the bill of exceptions and moves to strike out the bill on the ground that it was settled after the expiration of the term, and therefore the federal court had lost jurisdiction. It appears from the record that, after the trial, the appellant secured a number of orders extending the time for the preparation of his proposed bill of exceptions. These orders were dated January 26, 1932, March 17, 1932, April 4, 1932, and April 21, 1932. The first order extended the time 60 days after January 26; the next order 30 days after March 23; the next to May 1, 1932, and the last to May 10, 1932. The proposed bill was lodged with the clerk within the time fixed by the last order. Thereafter the United States attorney secured ex parte orders continuing the time "within which to serve proposed amendments to the proposed bill of exceptions." These orders were procured May 18, June 28, July 26, September 26, October 27, and November 9. The last order required the proposed amendments to be filed on or before November 18, 1932. The proposed amendments were served and filed within the period specified in the last order. The appellee's contention is that, although the orders procured by the appellant extend the term as well as the time for filing the proposed bill, the orders procured by the appellee merely extended the time for serving the proposed amendments. It has been held in numerous cases by the Circuit Court of Appeals in other circuits that the extension of time for filing of bills of exceptions operated to extend the term for the purpose of settling the bill. Ward v. Cochran, 150 U. S. 597, 14 S. Ct. 230, 37 L. Ed. 1195; Minahan v. Grand Trunk Western Ry. Co. (C. C. A.) 138 F. 37; Camden Iron Works Co. et al. v. Sater (C. C. A. 6) 223 F. 611; Cudahy Packing Co. v. City of Omaha (C. C. A. 8) 24 F.(2d) 3; Watjen et al. v. Louisville Tobacco Warehouse Co. (C. C. A.) 29 F.(2d) 801. The same rule would be applicable to orders extending time for serving proposed amendments. However, the proposed bill and amendments were not presented to the judge until long after the time fixed in the order for the filing of the proposed amendments. The difficulty thus presented, however, is not involved in the case at bar because of the fact that the first orders of the court extending the term and the time for filing the proposed bill of exceptions, not only extended both to a definite date, but also, in effect, extended the term until the bill of exceptions was settled and signed. The portion of the order referred to is as follows: "It is hereby ordered that the term and time for the signing and sealing of the bill of exceptions herein, as the same may be settled and signed, be, and the same is hereby extended for sixty days after the date hereof, and that whenever so settled and signed, the said bill of exceptions herein shall stand as settled, signed and filed, and made a part of the record herein, as of the 25th day of January, 1932, which 25th day of January, 1932 is within the original time allowed under the rules of this court for the presenting, signing and filing of said bill of exceptions herein."

It was stipulated that the order should be made in the foregoing form. The orders of March 17 and of April 21 extending the time and term were in the same form. We think that the orders in question extended the term of court until the bill of exceptions was signed. The appellee's motion is denied.

There is practically no dispute as to what was actually done by the defendants. At the opening of the trial, the attorney for the appellant made the following statement:

"Mr. Cannon. I will state, if the Court please, as far as Mr. Morrissey is concerned, we think there will be very few matters in dispute with respect to him. We admit the corporate entity of the bank and the fact it is a member of the Federal Reserve System, as alleged in the indictment. We think there will be no question as to the fact that these particular notes were executed, actually executed by the persons named in the indictment as being the signers of the notes. As far as Mr. Morrissey is concerned, there will be no dispute as to the fact the cashier's checks recited in the indictment were as a matter of fact issued by the Pacific National Bank. On those matters, so far as Mr. Morrissey is concerned, we are willing to stipulate on them for the purpose of expediting the trial and the only real issue so far as we now see it, as to Mr. Morrissey, is going to turn on the matter of intent anyway, and if by the making of stipulations of that kind as to the execution of those various documents, the trial can be expedited, we are very anxious to do that."

In defendant's opening statement, made after the government had rested, Mr. Cannon said, in part:

"Mr. Cannon. * * * I think the evidence here will show you that during the spring of 1929, and that summer and early fall, the bank was confronted with a very unusual situation. As a matter of fact, a grave situation, an extreme emergency; that these men in the conduct of the bank's business did those things the testimony will show they did do in absolute and entire good faith, without any intent to defraud or deceive anyone, and all of the acts that they performed in lending money, was done wholly and entirely with the idea of benefiting the bank and benefiting those interested in the bank, and not with the idea of deceiving or defrauding them.

"We think the evidence will clearly show that they did everything that was humanly possible for them to do for them to save the situation that was very very precarious, and that after all that testimony is in we think the jury will be well justified, in fact, compelled by the strength of those statements and the evidence that will be here adduced to find that there was no criminality here, and to acquit each and all of the defendants.

"Mr. Morrissey will take the stand in his own behalf, and will let you gentlemen know the motives that actuated him in performing his part in this episode and try if he can to give you men a word picture of the exact situation as it confronted the officials of the bank at that time."

We have made these quotations from statements of appellant's counsel to the court and jury for the purpose of making it clear that there is no substantial controversy as to the fact that the various transactions charged by the government occurred as charged, and that the defendants contended that, although the acts charged were in fact committed, they were performed with a good, and not with an evil, intent, to benefit and not to defraud the bank. With this preliminary statement we return to a more detailed statement of the facts involved in the case.

The charges involved all relate to the use of the funds of the Pacific National Bank for the purchase of stock in the Pacific National Company. This stock was purchased from time to time, and notes to cover the purchase price were executed by clerks and stenographers working in the bank who acted as dummies. It was known by the defendants that these persons were without financial responsibility. The notes were executed in the form used for unsecured notes, but the stock of the Pacific National Company thus purchased was deposited ostensibly as security for the payment of the notes. Some of these notes were signed by Arthur P. Adkisson, one of the defendants. Special reference will hereafter be made to this phase of the case. Stock thus purchased was sold from time to time as opportunity offered, and the proceeds credited upon the notes executed for the purchase price. The total amount of these notes aggregated $582,543.73, and the total amount remaining unpaid at the conclusion of the operations was $528,400.96. It thus appears that over half a million dollars of the Pacific National Bank, which will hereinafter be referred to as the bank, were used for the purchase of...