State v. Kelsey

• Decision Date: 15 November 1886
• Citation: 1 S.W. 838,89 Mo. 623
• Parties: STATE v. KELSEY.
• Court: Missouri Supreme Court

1 S.W. 838

89 Mo. 623

STATE v. KELSEY.

Supreme Court of Missouri.

November 15, 1886.

BANKS AND BANKING — OFFICER RECEIVING DEPOSIT WITH KNOWLEDGE OF INSOLVENCY OF BANK — REV. ST. Mo. § 1350 — PRIVATE BANKER.

Section 1350, Rev. St. Mo., declaring that "if any president, director, manager, cashier, or other officer of any banking institution, shall receive a deposit after he has knowledge that the bank is insolvent, he shall be guilty of larceny, was enacted to enforce section 27, art. 12, Const. Mo. 1875, on banking corporations, and does not apply to private banks and bankers.

Appeal from Cooper circuit court.

The Attorney General, for the State. Mr. Snoddy, Mr. Spurlock, and J. R. Walker, for appellant, Kelsey.

NORTON, J.

The indictment in this case was found by the grand jury of Morgan county, and is based on section 1350, Rev. St. On the trial of the cause in the Cooper county circuit court, where the cause had been transferred by change of venue, defendant was convicted, and the cause is before us on his appeal. It appears from the record, and the fact is conceded by the attorney general, that defendant was the owner of and conducting a private bank in the town of Versailles, Morgan county, under the name of J. B Kelsey & Co.; and it is claimed and insisted upon by counsel for defendant that his conviction under said section 1350, on which the indictment is based, is wrongful. In support of this contention it is argued that said section 1350 applies, and was intended to apply, only to those engaged in conducting incorporated banks, and not to persons engaged in conducting the business of private banking.

This contention involves the construction of said section, which is as follows: "If any president, director, manager, cashier, or other officer of any banking institution doing business in this state, shall receive, or assent to the reception, of any deposit of money or other valuable thing in such bank or banking institution, or if any such officer or agent shall create, or assent to the creation, of any debts or indebtedness by such bank or banking institution, in consideration or by reason of which indebtedness any money or valuable property shall be received into such bank or banking institution after he shall have had knowledge of the fact that it is insolvent, or in failing circumstances, he shall be deemed guilty of larceny, and, upon conviction thereof, shall be punished in the manner and to the same extent as is provided by law for stealing the same amount of money deposited, or valuable thing: provided, that the failure of any such bank or banking institution shall be prima facie evidence of knowledge on the part of any such officer or person that the same was insolvent, or in failing circumstances, when the money or property was received on deposit."

In determining the question whether it was the intention of the general assembly in the above enactment to include only the president, directors, manager, cashier, or other officers of incorporated banks, and not persons forming a voluntary association or partnership to engage in the business of private banking, we are justified in looking at the state of the law prior to the above enactment, to discover the evil the statute was designed to remedy, Prior to 1870 the stockholders in an incorporated bank under the constitution of 1865 were only individually liable for the debts of the corporation to an amount double the amount of the stock owned by them in the corporation. In 1870 an amendment to the constitution of 1865 was adopted, wherein it is declared that "in no case shall any stockholder be individually liable in any amount over and above the amount of stock owned by him or her;" and in the case of Schricker v. Ridings, 65 Mo. 208, it was held "that under this amendment a stockholder is not liable for a debt of the corporation if he has paid the whole amount of stock subscribed or owned by him."

The amendment adopted in 1870 was literally inserted in the constitution of 1875; and in view of the then existing state of the law, — that the directors and managers of an incorporated bank held its capital stock and property in trust for creditors and stockholders, and that creditors could not hold the stockholders individually liable beyond or over and above the amount of stock owned by them, — in order to secure a faithful administration of the trust, and give to persons becoming creditors, by depositing their money in such banking corporation, an additional guaranty, section 27, art. 12, of the constitution was inserted in the constitution of 1875, and is as follows: "It shall be a crime, the nature and punishment of which shall be prescribed by law, for any manager of a banking institution to create, or assent to the creation of, a debt or indebtedness by his bank after he has knowledge of the fact that the same is insolvent, or in failing circumstances; and any such officer, agent, or manager shall be individually responsible for such deposits so received, and all such debts so created, with his assent." Said article 12 is entitled "Corporations," and is devoted to that subject, and contains 27 sections, the first 11 of which are devoted to corporations generally, the next 13 to railroads, and the next 3 to banks, of which section 27, above quoted, is one. The irresistible inference to be drawn from this is that the words "banking institution" were intended to apply...