State v. Beaghler

• Decision Date: 04 June 1929
• Docket Number: 28741
• Citation: 18 S.W.2d 423
• Parties: STATE v. BEAGHLER
• Court: Missouri Supreme Court

18 S.W.2d 423

STATE v. BEAGHLER

No. 28741

Supreme Court of Missouri, Second Division

June 4, 1929

K. D Cross, of Savannah, Gresham & Gresham, of Platte City, and Eastin & McNeely, of St. Joseph, for appellant.

Stratton Shartel, Atty. Gen., and David P. Janes, Sp. Asst. Atty Gen., for the State.

OPINION

WALKER, J.

The appellant was charged by indictment in the circuit court of Andrew county, under section 3365, R. S. 1919, with having on the 3d day of May, 1926, feloniously assented to the reception on deposit, in the First Trust Company of Savannah, of a check for the sum of $ 1,000 with knowledge by the appellant at the time that the trust company was in failing circumstances. On his application a change of venue was awarded to the circuit court of Platte county, where the appellant was, in December, 1927, tried to a jury, convicted, and his punishment assessed at five years' imprisonment in the penitentiary. From that judgment he appeals.

On the 18th day of April, 1925, the First Trust Company was organized for the purpose of taking over the business and assets and assuming the liabilities of the First National Bank of Savannah, except the liabilities of said bank to its stockholders for its capital stock. The records of the said bank and the trust company bear witness to the consummation of the contract by and with the approval of the directors and stockholders of both of said institutions. The following statement of the facts and conclusions of law were prepared by Commissioner HIGBEE and are in the main adopted in this opinion:

The trust company took over the business of the First National Bank at the close of business on April 18, 1925, and continued in the same building, using the same books, equipment, and stationery of the First National Bank until it closed its doors on the morning of May 12, 1926. W. A. Boyer was president of both banks. John L. Beaghler (the appellant here) was cashier of the First National Bank and secretary of the First Trust Company. C. A. Lauber was employed by Beaghler as bookkeeper in the First National Bank and as assistant secretary and bookkeeper of the trust company. Beaghler was the chief functionary of both banks, making loans, looking after the books, receiving deposits, and conducting the correspondence. He was rarely absent. To all outward appearances there was no change in the continuance of the business of the First National Bank, except the name of the bank.

According to the 'Daily Statement Book,' the amount of the loans of the First National Bank on April 18, 1925, was $ 343,540.23. The loans of the First Trust Company on April 18, 1925, were $ 283,243.31, showing that the trust company did not charge itself with $ 60,296.92 of notes, classified as secondary assets. It took these notes to enable the First National Bank to strike a balance.

The daily statement book shows the total assets of the trust company on April 18, 1925, when it owed nothing for borrowed money, were $ 422,959.61; and on May 3, 1926, $ 397,080.58. This shows a decrease in assets of $ 25,879.03. On this last date it owed for borrowed money, $ 25,000. This indicates a decrease in assets, face value, between these dates of $ 50,879.03.

The deposits in the trust company on April 18, 1925, were $ 372,949.61. Deposits on May 3, 1926, were $ 310,798.32. This shows a slump in deposits of $ 62,150.29.

The total cash of the First Trust Company on hand and due from other banks on April 18, 1925, was $ 101,971.19. On May 3, 1926, it was $ 23,977.99. At the same time it owed other banks $ 44,606.08.

On May 3, 1926, Mrs. Dora Furst and her husband went into the First Trust Company and spoke to Mr. Beaghler, who was at one of the windows, about making a deposit. He directed Mr. Lauber, the assistant secretary who was at the other window, to wait on her. She produced a check for $ 1,000, drawn by her brother on the Wells-Hine Trust Company of Savannah, Mo., payable to herself, indorsed and handed it to Mr. Lauber, who deposited the check and gave Mrs. Furst a deposit slip therefor. This check was paid the following day to the First Trust Company. The trust company closed its doors on May 12, 1926, owing this deposit to Mrs. Furst.

The daily statement book, kept under the supervision of Mr. Beaghler, showed that the assets and liabilities of the trust company on April 18, 1925, including liability for capital stock, balanced; each total being $ 410,163.67. This balance was accomplished by crediting the trust company with the face value of the notes listed at $ 287,204.36, as assets.

The statute, section 11743, R. S. 1919, required the First Trust Company to maintain a reserve of 15 per cent. of demand deposits. So far as can be determined from the records in evidence, less than one-half of its required reserve was maintained.

The resolution of the board of directors, adopted May 12, 1926, reads: 'Whereas, the reserve has decreased below the legal limit and it is the judgment of the Board of Directors that this Trust Company should be placed in the hands of the State Finance: Therefore, be it resolved that the First Trust Company of Savannah, Missouri, be placed in the hands of the State Finance Commissioner for liquidation.'

The evidence shows that for some time before the trust company closed its doors, it resorted to the practice of 'kiting' checks, a practice participated in by the appellant, by which method the trust company had a fictitious credit on May 3, 1926, with the Empire Trust Company of St. Joseph, its correspondent, of $ 2,397.13; whereas, when it closed its doors its account with that company was overdrawn in the sum of $ 4,641.21. There was little change, if any, in the financial affairs of the trust company between those dates.

On April 15, 1926, Al Smith of Ogden, Utah, deposited in the trust company with the appellant a cashier's check for $ 4,594.01 on the Ogden State Bank of Utah, for collection. Appellant forwarded the check through the Empire Trust Company of St. Joseph for collection. On April 27, Smith was told by Beaghler, the appellant, that the check had not been collected. On the following day Smith again inquired, and was told by appellant that the check had not been heard from. On several days Smith inquired of appellant about the money, and at last appellant told him it was lost. On Saturday, May 8, Smith wired the Utah bank and on Sunday received a telegram stating that the check had been paid on April 21. On Monday morning, May 10, Smith went to the trust company and received from the appellant a demand certificate for $ 4,000 and $ 494.01 in cash. He had previously received $ 100 on his check. He went back to draw out his money and found a note on the door that the bank was closed.

J. B. Philippi, a farmer of Andrew county. owed the trust company two notes, and on April 21, 1926, asked the appellant to renew one of them which was then due, saying he could not pay the interest at that time. Appellant said that was too bad. Philippi stepped out, got the money at another bank, returned, and paid off both notes, about $ 500. Appellant said: 'The banking business is not what it was before the war. We are between the devil and the deep blue sea.'

On May 11, 1926, appellant, Boyer, and several of the directors of the trust company and Mrs. Gee, wife of Roy Gee, also a director, went to St. Joseph and had a conference with Charles E. Wright, president, and William F. Enright, vice president, of the Empire Trust Company, about negotiating a loan for the First Trust Company. The conference lasted from 7:30 p. m. until 5 a. m. of the next day. Boyer and appellant, Beaghler, said that unless they could negotiate a loan and secure some cash they did not think they would be able to open the First Trust Company the next morning. Boyer said he thought they could open the bank with $ 10,000; others thought it would take $ 50,000. The Empire Trust Company declined to make the loan, and on the return of the visitors to Savannah, the First Trust Company, pursuant to a resolution of the board of directors assigning that the reserve had decreased below the legal limit, closed its doors, as heretofore stated.

L. J. Mulligan, a state bank examiner, under the instructions of the bank commissioner, on May 13, 1926, took possession of the assets of the First Trust Company and from the books of the company made an inventory of its assets and liabilities. He made a statement of its resources and liabilities, taking the notes at their face value, which reads:

'Financial Statement as shown by Examination of Resources and Liabilities of the First Trust Company of Savannah, Missouri, County of Andrew, as of record at the close of business May 11, 1926, by Examiner L. J. Mulligan.

Resources

Loans and Discounts

$ 317,120 48

Overdrafts

2,801 51

County Warrants

160 00

Banking House

17,000 00

Furniture & Fixtures

4,000 00

Other Real Estate

2,734 30

Due from Banks

10,316 25

Cash Items

1,707 93

Cash on Hand

4,515 86

Profit & Loss Account

2,235 46

$ 362,591 79

Liabilities

Capital Stock

$ 50,000 00

Individual Deposits

195,977 06

Certificates of Deposit

23,252 81

Savings Deposits

21,273 08

Cashiers Checks

2,482 76

Due to Banks

44,606 08

Bills Payable

25,000 00

$ 362,591 79'

The inventory shows that 51 of the notes included therein, of the face value of $ 42,543.81, were held by the Liberty Central Trust Company of St. Louis as collateral for a loan of $ 25,000 to the First Trust Company. One of these notes was executed by Roy H. Gee, one of the board of directors, on March 24, 1926, for $ 7,000 to the First Trust Company. Other collateral notes are dated as late as April 14, 1926.

F. A Meinershagen, who lived at Chillicothe, Mo., was appointed a special...