State v. Easton

• Decision Date: 12 April 1901
• Citation: 113 Iowa 516,85 N.W. 795
• Parties: STATE v. EASTON.
• Court: Iowa Supreme Court

113 Iowa 516

85 N.W. 795

STATE

v.EASTON.

Supreme Court of Iowa.

April 12, 1901.

Appeal from district court, Fayette county; A. N. Hobson, Judge.

The defendant was charged by indictment with having on the 21st day of August, 1896, while engaged in the banking business as president of the First National Bank of Decorah, at Decorah, Iowa, “unlawfully, willfully, knowingly, and feloniously permitted, connived at, encouraged, accepted, and received on and for deposit in said bank * * * a certain deposit, in lawful paper money, * * * of and in the sum of one hundred dollars, from one John French, * * * and of the value of $100; the said bank being then and there insolvent, and the said James H. Easton, the defendant aforesaid, then and there well knowing that said bank was insolvent.” The defendant's motion to set aside the indictment and his demurrer to the indictment being overruled, he pleaded not guilty; and, upon trial had, a verdict of guilty was returned, and judgment of imprisonment for five years and for costs rendered on the verdict. From this judgment the defendant appeals. Affirmed.J. B. Powers, Dan Shea, Clements & Clements, and H. T. & C. W. Reed, for appellant.

Milton Remley, Atty. Gen., H. P. Hancock, Co. Atty., E. P. Johnson, and James H. Trewin, for the State.

GIVEN, C. J.

1. On and for a long time prior to August 26, 1896, the defendant was the president and general manager of the First National Bank of Decorah,--a bank duly authorized to transact business at Decorah as a national bank, under the laws of congress. On said 26th day of August, 1896, the defendant received from John French on deposit in said bank $100 in money, for which he executed to Mr. French a certificate of deposit payable six months after date, with interest at 4 per cent. “No interest after maturity.” The bank was then open and transacting business in the usual manner, and continued to do so until about November 10, 1896, when it was found to be insolvent and was put into the hands of a receiver. While the questions of the insolvency of the bank, and of defendant's knowledge on that subject at the time this deposit was received, are in issue, the jury was fully warranted in finding that the bank was then insolvent, and that the defendant knew that fact when he received the deposit. The extent of the liabilities of the bank, the character of its assets, including a large liability against the defendant, and defendant's active control and management of the bank, leave no room for debate on these issues.

2. Appellant's counsel present two propositions, as follows: “First. Does the statute of Iowa prohibiting banks or their officers or agents from accepting and receiving deposits when such banks are insolvent apply to national banks organized and doing business under and in pursuance of the laws of the United States? Second. If sections 1884 and 1885 of the Code be held to apply to national as well as state and private banks or bankers, then are they valid in so far as they apply to national banks organized and conducting business under the laws of congress?” Section 1884, c. 12, tit. 9, of the Code provides that “no bank, banking house, exchange broker, deposit office, firm, company, or corporation doing a banking * * * or deposit business shall, when insolvent, accept or receive on deposit * * * any money, bank bills, United States treasury notes, or currency,” etc. Section 1885 provides as follows: “If any such bank, banking house, exchange broker, deposit office, firm, company, corporation or person shall receive or accept on deposit any such deposits, as aforesaid, when insolvent, any owner, officer, director, cashier, manager, member or person knowing of such insolvency, who shall knowingly receive or accept, be accessory, or permit, or connive at receiving or accepting on deposit therein, or thereby, any such deposits, or renew any certificate of deposit, as aforesaid, shall be guilty of a felony,” etc. Chapter 10 of said title 9 provides for the organization of savings banks; chapter 11, for the organization of state banks; and chapter 12, in addition to said sections 1884 and 1885, provides how such banks shall be managed and controlled. Appellant insists that said sections 1884 and 1885 only apply to the banks provided for in said title 9. The language of said sections included many other than savings and state banks, and the construction contended for would exempt all these others from the prohibitions and penalties of said sections, which would leave the public unprotected as against such frauds by brokers, private bankers, and others than savings and state banks that conduct a deposit business. These sections were originally enacted as chapter 153 of the Laws of the 18th General Assembly, and re-enacted in the Code, with slight changes, as a part of said chapter 12. They might more properly have been placed in the criminal statutes, but the fact of their re-enactment as part of chapter 12 does not warrant the restriction claimed. We are in no doubt but that the legislative intent is that said sections shall apply to all persons, corporations, and associations receiving deposits of money. See State v. Fields, 98 Iowa, 748, 62 N. W. 653.

3. Appellant contends in support of his second proposition that said sections 1884 and 1885 of the Code of Iowa are invalid as to national banks,--in other words, that they do not apply to national banks. The argument is that under the laws of congress such banks are authorized to receive deposits, and that, “where an act is authorized to be done by a law of the United States, such act is thereby withdrawn from the operation of the criminal laws of the state, unless otherwise expressly provided by congress, and that the performance of such act in pursuance of, and as authorized by, such law of the United States cannot be punished as an offense against any law of the state.” This statement of the law is in substantial accord with the authorities, and the inquiry is whether the defendant was...