State v. Brewer

• Decision Date: 27 January 1932
• Docket Number: 241.
• Citation: 162 S.E. 363
• Parties: 202 N.C. 187, 81 A.L.R. 1424 v. BREWER. STATE
• Court: North Carolina Supreme Court

162 S.E. 363

202 N.C. 187, 81 A.L.R. 1424

STATE v. BREWER.

No. 241.

Supreme Court of North Carolina

January 27, 1932

Appeal from Superior Court, Wake County; M. V. Barnhill, Judge.

J. M Brewer was convicted of receiving, or permitting to be received, deposits in bank after knowledge of bank's insolvency, and he appeals.

No error.

Trial court's decision that witness is expert will not be reviewed on appeal, if there is any evidence to sustain decision.

This was a criminal action against John M. Brewer, T. E. Bobbitt S.W. Brewer, T. M. Arrington, and R. M. Squires, tried before his honor, M. V. Barnhill, and a jury, at the June special term, 1931, of Wake superior court, upon a bill of indictment found at the June term, 1931, of said court, charging said defendants, including said John M. Brewer, he being an officer, to wit, president of the Citizens' Bank of Wake Forest, N. C., with receiving, or permitting to be received deposits in said bank at said time knowing the said bank to be insolvent in violation of section 224 (g), N.C. Code 1927 (Michie). At the conclusion of the state's evidence motion for judgment as of nonsuit as to the defendants T. M. Arrington and R. M. Squires was allowed by the court below. There was a verdict of not guilty by the jury as to defendant S.W. Brewer. Upon the foregoing charge, the defendant John M. Brewer was placed upon his trial, and pleaded not guilty. The jury returned a verdict of guilty.

The court below rendered judgment on the verdict: "And now, the defendant, J. M. Brewer, being at the Bar of the Court in his own person, and the judgment of the Court being prayed by J. C. Little, Esq., Solicitor for the State; It is Ordered, Considered and Adjudged that the defendant, the said J. M. Brewer, now here, be imprisoned in the State Prison at Raleigh, N. C., for an indeterminate sentence of not less than one year nor more than three years, as provided by section 7738 of the Consolidated Statutes of North Carolina." The defendant made numerous exceptions and assignments of error, and appealed to the Supreme Court.

Chas. U. Harris, Willis G. Briggs, W. H. Sawyer, and Wm. B. Jones, all of Raleigh, for appellant.

D. G. Brummitt, Atty. Gen., and A. A. F. Seawell, Asst. Atty. Gen., for the State.

CLARKSON J.

The defendant was indicted under section 224(g) N.C. Code 1931 (Michie), which is as follows: "Any person, being an officer or employee of a bank, who receives, or being an officer thereof, permits an employee to receive money, checks, drafts, or other property as a deposit therein when he has knowledge that such bank is insolvent, shall be guilty of a felony, and upon conviction thereof shall be fined not more than five thousand dollars or imprisoned in the state prison not more than five years, or both. Provided, that in any indictment hereunder insolvency shall not be deemed to include insolvency as defined under subsection (d) in the definition of insolvency under section two hundred and sixteen (a). (1921, c. 4, s. 85; 1927, c. 47, s. 17.)"

Code 1931, § 216(a), in part: "The term 'insolvency' means: (a) when a bank cannot meet its deposit liabilities as they become due in the regular course of business; (b) when the actual cash market value of its assets is insufficient to pay its liabilities to depositors and other creditors; (c) when its reserve shall fall under the amount required by this act, and it shall fail to make good such reserve within thirty days after being required to do so by the commissioner of banks; (d) whenever the undivided profits and surplus shall be inadequate to cover losses of the bank, whereby an impairment of the capital stock is created."

R. S. Gochenour, a witness for the state, who, after proper inquiry, was adjudged an expert by the court, testified, in part: "After relating his experience as a public accountant; that he was a member of the firm, or employed by the firm of A. M. Pullen & Company, Certified Public Accountants, and that he was employed by the Banking Department of the State Corporation Commission to examine the books of the bank with the idea of determining its assets and liabilities, and that he did investigate the value of the papers and other property of the bank, whereupon the following questions were asked him:

"Q. Did you investigate the value of the papers and other property of the bank? A. Yes, sir.

"Q. Please state to His Honor and the jury to what extent and how you investigated the value of the assets, the notes and other property of the bank. A. Well, I got the directors together, all of the Board of Directors--

"Q. Right there; that includes the defendants here? A. Yes, sir.

"Q. All of them? A. All of them were there. I got the opinion of them individually and collectively on the value of the various assets, and after that I had the Cashier of the other bank in Wake Forest go over the assets and give me his opinion on them and also one other outside disinterested party, taking each asset individually.

"Q. Please state whether or not you consulted each one of these defendants, to-wit T. E. Bobbitt, J. M. Brewer, S.W. Brewer, T. M. Arrington, and R. M. Squires. A. I am absolutely certain about all of them, except Dr. Squires. I think he was there too, but I am not absolutely certain about him.

"Q. Mr. Gochenour, from your examination of the bank's books, its assets and liabilities, including all property of the bank and all liabilities of the bank, please state whether or not you formed an opinion at that time as to whether the bank was solvent or insolvent. A. Is it proper for me to ask for a definition of the word 'insolvency,' so there will be no misunderstanding as to what is meant?

"Q. Keeping in mind the same question that I asked you, and keeping in mind that the law of North Carolina is that a bank is considered insolvent when the actual cash market value of its assets is insufficient to pay the liabilities to the depositors and other creditors, assuming that to be the correct legal definition of the term 'insolvent,' please answer the question I asked you. (To all the foregoing questions and answers, defendants in apt time objected; objection overruled; defendants excepted.)

"Q. Go ahead and state whether you had formed an opinion at that time? A. Yes, sir.

"Q. From your examination of the assets and liabilities, from your examination of this bank's books, and from information you obtained from these very defendants on trial here, please state whether or not, in your opinion, on March 26, 1929, and also on March 25, 1929, The Citizens Bank of Wake Forest was solvent or insolvent. (Objection by all defendants; objection overruled; defendants excepted and assigned error.) A. Yes, sir, it was insolvent. I am basing that opinion upon my examination of what constituted the assets, plus the information gained from these various defendants."

The witness Gochenour further testified "that the estimate at that meeting was made on each asset separately and all were asked to state fully their opinion in regard to it, and they either concurred openly or did not make any objection to the values as discussed openly at the meeting."

The witness went into detail as to the value of the assets and liabilities of the bank, and testified that the bank was insolvent $102,273.19, the total liability of the bank was $185,198.98, and face value of assets was $185,404.65, leaving a net face value of $205.67. The total amount of deposits was $134,988.21. "A certificate of deposit issued to W. R. Powell, Commissioner of the Sinking Fund of the town of Wake Forest was $8,627.24 and accrued interest on that certificate of $138.03. There was a deposit of J. Milton Mangum, Treasurer of Wake County for $36,000, and accrued interest on that deposit of $463.89." The witness further testified that the defendant J. M. Brewer at the time the bank failed was, according to the bank's books, indebted to the bank, by both direct and indirect liability, in the sum of $18,417.63, to which testimony the defendant objected and excepted, and assigned error. The witness further testified that, according to the bank's books, the defendant had on deposit to his personal account the sum of 23 cents. The witness was permitted to testify that the firm of W. C. Brewer & Co. (J. M. Brewer being a partner) had an overdraft in the bank amounting to $3,167.63. That cash in the bank when it closed, according to witness' audit, was $781.90. The witness further testified that as a part of the assets carried on the books of the bank was equity in real estate at $64,076.60. "That all these items of real estate were received by the Bank as result of foreclosure proceedings prior to December 1, 1924; that these items of real estate had been carried on the books of the bank at the amount paid for them at foreclosure proceedings, to-wit, $64,076.60, from December 1, 1924, until the day the bank closed; that there were first mortgages of $44,388.64 ahead of the amount at which the bank bought the land in at foreclosure." The witness further testified that the condition disclosed by the investigation of the books showed that the trouble of the bank was depreciation of land values and insolvency of makers of notes, and that the witness did not find a false entry in the bank and did not find a concealment or anything of that kind, and that the books were clear and that any one could have examined the books covering five or ten years and arrived at its condition, and there was no suggestion of any substitution of books, and apparently those were the same books that they had had all the time.

C. I Taylor testified, in part, that most of the assets of the bank had been deposited with certain creditors for their protection; that one bank in...