People v. Comstock

• Decision Date: 15 December 1897
• Court: Michigan Supreme Court
• Parties: PEOPLE v. COMSTOCK.

73 N.W. 245

115 Mich. 305

PEOPLE v. COMSTOCK.

Supreme Court of Michigan

December 15, 1897

Error to circuit court, Mason county; James B. McMahon, Judge.

Chester W. Comstock was convicted of violating the banking law, and brings error. Reversed.

Fred A Maynard, Atty. Gen., and A. B. Cogger, Pros. Atty., for the People.

Frank Dumon (M. L. Dunham and Gilbert H. Blodgett, of counsel), for defendant.

HOOKER, J.

The defendant was convicted upon a charge that he had violated section 58 of the general banking law, being 3 How. Ann. St � 3208f7, which reads as follows: "Sec. 58. Every president, director, cashier, treasurer, teller, clerk or agent of any bank, who embezzles, abstracts or wilfully misapplies any of the moneys, funds, credits or property of the bank, whether owned by it or held in trust, or who without authority of the directors, issues or puts forth any certificate of deposit, draws any order or bill of exchange makes any acceptance, assigns any note, bond, draft, bill of exchange, mortgage, judgment or decree, or who makes any false entry in any book, report or statement of the bank with intent in either case to injure or defraud the bank, or any company, corporation or person or to deceive any officer of the bank or any agent appointed to examine the affairs of such bank, and any person who with like intent aids or abets any officer, clerk or agent, in violation of this section, or who shall issue or cause to be issued, or put in circulation, any bill, note or other evidence of debt to circulate as money, upon conviction thereof, shall be imprisoned in the state prison or in the state house of correction and reformatory at Ionia, not to exceed twenty years." The information contains five counts, but only the last three were relied upon at the trial. In each of these the defendant is charged with having on the 22d day of October, 1896, while acting as clerk, agent, and manager of the Mecosta County Savings Bank, drawn an order or bill of exchange with intent to injure and defraud said bank. The defendant stood mute, and a plea of not guilty was entered by direction of the court. At the time of this transaction, D. F. Comstock, defendant's father, was a large stockholder, and president, of the bank. On October 23, 1896, an acceptance of D. F. Comstock & Co. for $2,000 was to fall due, and on the evening of October 22d the defendant drew and forwarded to the holder a draft upon the Hanover National Bank of New York to pay said acceptance. The senior Comstock was at this time a debtor to the Mecosta Bank in an amount largely beyond the lawful limit, and, it appearing that the draft was drawn and mailed without the express authority of the board of directors, the judge submitted to the jury only the question of defendant's intent to injure and defraud the bank, which specific intent they were told must be proved to the exclusion of a reasonable doubt, to warrant a conviction. The defendant testified that he intended to charge the draft to his father's account, or to the account of D. F. Comstock & Co., which was apparently equivalent thereto, and that he believed that his father was able to and would pay it, and that he had no thought that the bank would lose a dollar by the transaction. In other words, he gave testimony tending to prove that when he drew the paper he harbored no design to cause the bank pecuniary loss, or to injure or defraud it in any way; and it is urged that, if this was true, he should not have been convicted.

Section 52 of the law provides that the total liabilities of any person to the bank shall not at any time exceed 10 per cent of its capital, and it seems to have been the theory of the prosecution that the intentional extension of credit beyond the limit necessarily involved an intent to injure and defraud the bank. The learned circuit judge who tried the case does not seem to have assented to this view of the law, for, while he said to the jury that there was no dispute about the drawing of the order without the consent of the directors to pay an acceptance of D. F. Comstock & Co., he left to the jury the question of the defendant's intent, which he need not have done if the legal inference of an intent to injure and defraud the bank necessarily follows the extension of credit. Again, in defining these words, he said: "I suppose it is not necessary, gentlemen, for me to define in this case with any more particularity than their common meaning gives the words 'injure and defraud.' Certainly these words are used in this statute, I think, largely in their popular meaning, and of course to injure a bank ordinarily would be to depreciate or destroy, squander or dissipate, some of its property or assets." His dissent from this proposition is also implied by the following quotation, in which he gives prominence to the withdrawal of the fund without putting an equivalent into the bank: "For the purpose of this case it is sufficient to say that the drawing of this order upon the Hanover National Bank of New York without putting into the bank an equivalent therefor, and without the authority of its board of directors, constituted an injury and fraud upon the bank. There is no doubt about that. Therefore no time need be spent in determining nice discriminations as to the exact meaning of these words 'to injure and defraud."' This was followed by instructions to the jury concerning the inferences that they were authorized to draw from the circumstances and the application of the rule that a man may be presumed to intend the natural and necessary consequences of his acts. He proceeded: "And so, in this case, if the offense here which is charged against Chester W. Comstock was the result of misapprehension or accident, of course he is excusable; but, if he intentionally, purposely, and knowingly drew this order, and intended to deprive the bank of two thousand dollars of its assets, and without consideration, and without the authority of the bank or its directors, he is guilty as charged in this information. The intent would be presumed from the conscious, purposeful performance of such an unlawful action. In other words, sometimes the act determines the intent, and the jury is justified in inferring an intent. The purpose which a man entertains in his mind secretly and privately cannot often be proven by open, overt testimony. These intentions and purposes are not something upon which you can put your finger, which you can weigh and measure, define and locate, as you can some physical object. They must be inferred from circumstances, and in this case the only way you have of determining the intent of Chester W. Comstock is to examine all the surroundings,-examine what he did, and under what circumstances he acted, with what knowledge he acted,-and determine the question of his intent. Wrongful acts, intentionally committed,-wrongful in law or in fact,-imply the wrongful intent which they indicate, and if the respondent knowingly and purposely drew this draft to pay the debt of D. F. Comstock & Co., intending to appropriate the funds of the bank to that purpose, without the consent of its directors, and without any authority in law or in fact, it would constitute an injury upon this bank, and the respondent is guilty as charged." So far it would perhaps appear that the court intended the jury to understand that drawing the draft with an intention to pay D. F. Comstock's acceptance at the expense of the bank was necessary to a conviction (though the last quotation may possibly be open to another construction), but from what follows we are of the opinion that the judge lost sight of this feature, and inadvertently laid down a different rule. The charge continued as follows: "The respondent here has testified that he intended to charge the amount of this draft to D. F. Comstock & Co. on the...