Smith v. State

• Decision Date: 23 June 1932
• Docket Number: 25,922
• Parties: Smith v. State of Indiana
• Court: Indiana Supreme Court

181 N.E. 519

203 Ind. 561

Smith v. State of Indiana

No. 25,922

Supreme Court of Indiana

June 23, 1932

1. APPEALS---Review of Ruling on Requested Instructions---Requested Instructions not in Record---Question not Presented.---No question is presented as to the refusal of the court to give requested instructions where the requested instructions are not in the record. p 563.

2. APPEALS---Review of Ruling on Requested Instructions---Ruling must be Specified as Ground for New Trial.---The refusal of the court to give a requested instruction is not presented for review on appeal where such action of the court was not specified as a ground for a new trial. p. 563.

3. STATUTES---Construction---Meaning to be Given.---The words of a statute must be given their ordinary and usual meaning unless there is something in the statute indicating that a more limited and restricted meaning was intended (2479 Burns 1926). p. 566.

4. BANKS AND BANKING---"Bankers' Embezzlement"---Meaning of Word "Insolvent"---Commonly Accepted Meaning Intended.---The word "insolvent" in the statute defining "bankers' embezzlement" (2479 Burns 1926) respecting the receiving of bank deposits when insolvent must be construed in its most commonly accepted meaning. p. 566.

5. BANKS AND BANKING---"Bankers' Embezzlement"---When Bank is not Insolvent.---A bank is not "insolvent" within the meaning of the criminal statute respecting receiving deposits when the bank is insolvent (2479 Burns 1926) if the assets of the bank, on a fair valuation, are sufficient, within a reasonable time, to pay all its liabilities, exclusive of stock liability. p 566.

6. BANKS AND BANKING---Prosecution for "Bankers' Embezzlement"---Instruction as to "Insolvency" of Bank---Held Reversible Error---In a prosecution of a bank president for "bankers' embezzlement" (2479 Burns 1926), an instruction that the bank was insolvent if unable to pay its depositors on demand or if it could not pay all its liabilities as they became due in the ordinary course of business was reversible error and should not have been given. p. 571.

From Monroe Circuit Court; Herbert A. Rundell, Judge.

John H Smith was convicted of the crime of "bankers' embezzlement" by receiving a deposit when the bank was insolvent, and he appealed.

Reversed.

S. C. Kivett, J. L. Kivett and Robert G. Miller, for appellant.

James M. Ogden, Attorney-General, and V. Ed Funk, Deputy Attorney-General, for the State.

OPINION

Roll, C. J.

This is an appeal from a judgment of the Monroe Circuit Court, wherein appellant was adjudged guilty of the crime of embezzlement in receiving a deposit in the Exchange Bank of Spencer, Indiana, on June 15, 1929, at a time when the bank was alleged to be insolvent. § 2479 Burns 1926, Acts 1907 p. 14.

The error relied upon for reversal is the action of the court in overruling appellant's motion for a new trial, wherein it is contended the court erred: (1) In giving instruction No. 8 by the court of his own motion; (2) in refusing to give appellant's tendered instruction No. 9; (3) the verdict of the jury is contrary to law; (4) the verdict of the jury is not sustained by sufficient evidence.

Appellant was president of the Exchange Bank of Spencer, located at Spencer, Indiana, and was charged in the indictment herein with unlawfully, feloniously and fraudulently receiving from John E. Harrison $ 826.67, as a deposit with said bank, on June 15, 1929, and that said bank was then and there wholly insolvent, which fact was then and there known to said president, and whereby said sum was lost to said depositor. The bank closed at the usual closing hours on Saturday, June 15, 1929, and failed to open for business on Monday, June 17, or thereafter.

There was a change of venue from Owen County to Monroe County where the case was tried before a jury, which returned a verdict of guilty, and judgment was pronounced accordingly.

Appellant in his motion for a new trial challenges the correctness of certain instructions given by the court on its own motion; and also complains of the refusal to give instructions Nos. 20, 21, 22, 23 and 24 tendered and requested by him.

The record does not show appellant tendered any such numbered instructions, but does show he tendered instructions Nos. 1 to 9, inclusive. Instructions Nos. 20, 21, 22, 23 and 24 are not a part of the record and therefore no question as to the correctness of such instructions is presented to this court. Foreman v. State (1929), 201 Ind. 224, 167 N.E. 125. Likewise no question is presented to this court in refusal to give tendered instruction No. 9, as appellant did not assign such refusal as a cause in his motion for a new trial. § 610 Burns 1926, cl. 8; Reeves v. Plough (1872), 41 Ind. 204; Jones v. Layman (1889), 123 Ind. 569, 573, 24 N.E. 363.

Appellant challenges instruction No. 8, given by the court of its own motion, which instruction reads as follows: "One of the questions for you to determine in this case is whether the Exchange Bank of Spencer, Indiana, was solvent or insolvent, on the 15th day of June 1929.

"This is a question of fact to be determined by you as any other fact; from the evidence in the case.

"I instruct you that a bank is solvent when it has enough assets to pay, within a reasonable time, all of its liabilities as they become due in the ordinary course of business; or in shorter terms, when it can pay its depositors on demand in accordance with its promises.

"When the actual cash market value of the assets of the bank is not sufficient to meet its liabilities in the manner and form above stated, such bank is insolvent." It is to the latter part of this instruction that appellant most seriously objects.

Is a bank insolvent when the actual cash market value of its assets is not sufficient to pay its depositors upon demand or in the usual course of business? We do not think that this is necessarily true. A bank may be solvent and yet not be able to pay all of its depositors upon demand or even in the ordinary course of business. If the rule is to be adhered to that a banking concern must keep its financial matters in such a condition that its assets could be turned into or required to be turned into cash at such short notice, it would be a matter of impossibility for a banking concern to exist as a business institution, or continue with any degree of safety to those connected therewith, and under such a rule its officers might and could at any time be adjudged criminals and made felons when there was no evidence of fraud or criminal intent on their part. Such a requirement of banks is not in accord with good judgment or sound reasoning.

The question, when is a bank insolvent within the meaning of a criminal statute is a question of first impression in this state but has been before the courts of last resort in several other states, and we find that two different rules have been applied in such courts. In the case of State v. Cadwell (1890), 79 Iowa 432, 44 N.W. 700, which is one of the first cases to decide this question, they adopted what may be designated as the "bankruptcy," or "traders and merchants" rule. In that case the court quotes with approval from Thompson v. Thompson (1849), 4 Cush. (Mass.) 127, as follows: "'By the term 'insolvency,' however, as used in these statutes, [meaning insolvency statutes] we do not understand an absolute inability to pay one's debts at some future time, upon a settlement and winding up of all a trader's concerns, but a trader may be said to be in insolvent circumstances when he is not in a condition to pay his debts in the ordinary course, as persons carrying on trade usually do.'"

The court further said: "'In Toof v. Martin, 13 Wall. 40, 20 L.Ed. 481, the court, after referring to the more general and popular meaning of the word 'insolvency,' adds: 'But it is also used, in a more restricted sense, to express inability of a party to pay his debts as they become due in the ordinary course of business. It is in the latter sense that the term is used when traders and merchants are said to be 'insolvent'; and, as applied to them, it is the sense intended in the act of congress.'"

Other cases are cited in the Iowa case in support of the above rule, but it will be noted that all of them are civil cases, and the construction given by the different courts applies to the sense in which the word "insolvent" is used in bankruptcy and insolvency statutes, and not to criminal statutes. We think in the construction of the statute here involved, being a criminal statute, we should endeavor to give the meaning thereto intended by the Legislature. One of the cardinal principles employed in statutory constructions is to give to the words employed by the Legislature to express their intent their ordinary, general and usually accepted meaning, unless there is something in the statute that would at least indicate that the words were to be construed differently, and a more limited and restricted meaning was intended. State v. Shelton (1906), 38 Ind.App. 80, 77 N.E. 1052; Boyer v. State (1908), 169 Ind. 691, 83 N.E. 350. As we read this statute (§ 2479 Burns 1926), we find no reason for holding that the Legislature intended the word "insolvent" to be construed in a limited and restricted meaning, and we therefore hold that it should receive its general and most commonly accepted meaning.

We think an officer of a bank should not be held guilty, under our statute, if, at the time the deposit was received, the assets of the bank fully equaled in value the sum of its debts even though it may require some time to realize on those assets. The gist of the matter is that a deposit is received by a banker, knowing or having good reason to believe that the money will be lost to...