State v. Davis
| Decision Date | 15 June 1932 |
| Docket Number | 585. |
| Citation | 164 S.E. 737 |
| Parties | 203 N.C. 13, 203 N.C. 35 v. DAVIS et al. STATE |
| Court | North Carolina Supreme Court |
On Motion to Review Record and Reconsider Opinion June 29, 1932.
Appeal from Special Term, Superior Court, Buncombe County; Barnhill Judge.
Wallace B. Davis, Luke Lea, and Luke Lea, Jr., were convicted of conspiracy to defraud a bank and misapply its funds and of fraudulent misapplication of its funds pursuant to a criminal conspiracy, and they appeal.
No error.
Judgment cannot be stayed for nonessential or minor defects; modern tendency being against technical objections not affecting merits. C.S. § 4625.See, also, 164 S.E. 732.
Criminal prosecution tried upon the following indictments:
In this count the defendants are charged with conspiracy, in that it is alleged they feloniously agreed, conspired, and confederated among themselves and with J. Charles Bradford and others, Wallace B. Davis being an officer, director, and employee of the Central Bank & Trust Company, to cheat defraud, or injure the said Central Bank & Trust Company and to misapply its moneys, funds, and credits to the amount of $300.000 on or about October 8, 1930, contrary to the form of the statute in such case made and provided and against the peace and dignity of the state.
In this count the defendants are charged with conspiracy, in that, it is alleged they feloniously agreed, conspired, and confederated among themselves and with J. Charles Bradford and others, Wallace B. Davis being an officer, director, and employee of the Central Bank & Trust Company, to cheat defraud, or injure the said Central Bank & Trust Company, and to misapply its moneys, funds, and credits to the amount of $100,000, on or about October 8, 1930, contrary to the form of the statute in such case made and provided and against the peace and dignity of the state.
In this count (single count bill), the defendants and J. Charles Bradford--Wallace B. Davis and J. Charles Bradford being officers and directors of the Central Bank & Trust Company--are charged, pursuant to a criminal conspiracy, with the fraudulent and felonious misapplication of more than a million dollars of the funds, credits, and property of the said Central Bank & Trust Company on or about November 19 1930, contrary to the form of the statute in such case made and provided and against the peace and dignity of the state.
Statement of the Case.
Preliminarily, it may be stated that, at the times material to the charges laid in the indictments, Wallace B. Davis and J. Charles Bradford were president and cashier respectively, as well as directors, of the Central Bank & Trust Company, a banking corporation chartered under the laws of this state with its principal place of business at Asheville, N.C. The said Davis was also president of the Central Securities Company of Asheville, a company affiliated with the bank. The defendants Luke Lea, Luke Lea, Jr., and E. P. Charlet, were residents of Nashville, Tenn., and interested, as officers, agents, employees, or otherwise, in a number of business enterprises in that state, including banks, newspapers, brokerage, and insurance firms.
The Central Bank & Trust Company was in need of money. It was the thought of Luke Lea expressed as early as May 5, 1930, in a letter to Wallace B. Davis, that the "North Carolina situation" could be taken care of by the merger of a number of banks and increasing the original capital assets from time to time by the "Holding Company purchasing the increased capitalization of the Central Bank in North Carolina so as to acquire other attractive banking situations." The details of the proposed organization are not disclosed by the record, but it does appear that transactions of considerable magnitude were contemplated. On May 16, Lea again wrote Davis, thanking him for booklet containing the "Banking Law of North Carolina" and inclosed two consolidated statements of "the North Carolina banks," evidently those under consideration for the merger.
Davis confided to W. D. Harris, manager of the bond department of the Central Bank and vice president of the Central Securities Company, that "he hoped to work out some matters in cooperation with Col. Lea." His statement was that he thought it would be to the advantage of both himself and Lea to co-operate on certain matters in New York, and hoped their plans would be successful; that he (Davis) was interested in commercial banking and would follow that; that Col. Lea was interested in newspaper publishing and would follow that; and that Mr. Caldwell (meaning Rogers Caldwell) would run the investment banking side of their enterprise.
A number of firms, in which the Leas were interested, opened accounts with the Central Bank & Trust Company and obtained banking accommodations, as did the Leas personally. Later, all became heavily indebted to the bank.
On September 2, Lea wrote Davis that Rogers Caldwell would handle certain bonds, and by October, 1930, the general plan of the defendants had broadened out so as to include various interests in Kentucky. By this time, Luke Lea, Jr., is writing to Davis and suggesting that they could buy controlling interest in a bank in Kentucky for $60,000, pay a 300 per cent. cash dividend, sell a good part of nearly one million in bonds owned by the bank, and substitute "our issues instead."
The character of the transactions carried on by the defendants is disclosed by the following excerpt from a letter written by Luke Lea, Jr., under date of October 10, 1930, to J. C. Bradford, cashier of the Central Bank & Trust Company:
In all, the record discloses that the Leas and the companies in which they were interested borrowed from the Central Bank & Trust Company a total of $875,000; that, in the short period from September 15 to November 1 approximately $780,000 in certificates of deposits were issued and handled by the defendants; and that during the period covered by the evidence, from May to November, more than a million dollars in cashier's checks and drafts were issued and handled by the defendants. In addition, the Leas had in their possession bonds of the Central Securities Company and the Universal Mortgage Company, which they obtained from the Central Bank & Trust Company without paying for them, and a part of which they were able to use for credit purposes. During all this time, the cash reserve of the Central Bank & Trust Company was not only deficient, prohibiting such loans under the law, but the evidence tends to show that the bank was then insolvent. Luke Lea's personal account was overdrawn much of the time, at one time as much as $90,000. The Central Bank & Trust Company closed its doors November 11, 1930.
Motions, Objections, and Rulings Prior to Trial.
Prior to entering upon the trial of the cause, the defendants asked for a continuance, principally upon the ground of the sudden illness of L. E. Gwinn, one of defense counsel, which, it is alleged, resulted in defendants' unpreparedness to go to trial. Overruled; exception.
The motions for continuance having been denied, the nonresident defendants filed pleas in abatement on the grounds that there was no evidence before the grand jury except hearsay evidence; and that said defendants were neither actually nor constructively present within the state of North Carolina at the time or times of the commission of the several offenses set out in the indictments. Overruled; exception.
The defendants then lodged a motion for change of venue, alleging that a fair and impartial trial could...
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