U.S. v. Tidwell, 76-4205

• Decision Date: 14 September 1977
• Docket Number: No. 76-4205,76-4205
• Citation: 559 F.2d 262
• Parties: 2 Fed. R. Evid. Serv. 185 UNITED STATES of America, Plaintiff-Appellee, v. Lewie Frank TIDWELL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 262

559 F.2d 262

2 Fed. R. Evid. Serv. 185

UNITED STATES of America, Plaintiff-Appellee, v. Lewie Frank TIDWELL, Defendant-Appellant.

No. 76-4205.

United States Court of Appeals, Fifth Circuit.

Sept. 14, 1977.

James G. Etheredge, Richard H. Black, Fort Walton Beach, Fla., for defendant-appellant.

Nickolas P. Geeker, U. S. Atty., Emory O. Williams, Jr., Asst. U. S. Atty., Pensacola, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Florida.

Before WISDOM, SIMPSON and TJOFLAT, Circuit Judges.

SIMPSON, Circuit Judge:

Appellant, Lewie Frank Tidwell, was convicted upon trial by jury under seven counts of an original ten-count indictment. ¹ These counts fell into two groups: Counts One, Three, Five, Six and Seven alleged that Tidwell wilfully and knowingly issued various letters of credit, drawn against the credit of the Eglin National Bank, without authority of the Bank's board of directors, in violation of Title 18, U.S.C. § 1005. Counts Nine and Ten alleged that Tidwell wilfully and knowingly misapplied bank funds with the intent to injure and defraud the bank in violation of Title 18, U.S.C. § 656. Tidwell was sentenced to three years on each count, all sentences to run concurrently. In this appeal, he raises three points, one relating to the unauthorized issuance charges, the others to the misapplication of funds charges. We affirm his conviction as to Counts Nine and Ten and do not reach the other counts under the concurrent sentence doctrine.

I. THE FACTS

Tidwell was hired in September 1972 to serve as president of the Eglin National Bank. While in that position, he drew and issued several letters of credit for the benefit of different persons. At no time did he notify or seek approval from the board of directors with regard to these potential obligations. The unauthorized issuance of these letters of credit, including one in the amount of $43,500 to Marvin Chapman, formed the basis for Counts One through Seven.

Counts Nine and Ten involved a complex transaction in which several banks, principally Eglin and Merchants National of Mobile, loaned $600,000 to Marvin Chapman who offered as security two parcels of undeveloped land. In June 1974 Chapman approached Tidwell and offered 37 condominium units valued at $700,000 as additional collateral for his indebtedness if Eglin would do two things: (1) cover a check for $43,000 written by Chapman without sufficient funds, and (2) pay approximately $40,000 for the mortgage on the condominiums held by the Great American Mortgage Company. Tidwell contacted Merchants Bank and on July 17, 1974, Merchants credited Eglin's account in the amount of $85,000 to pay off the first mortgage on the condominiums. Tidwell applied $43,000 of these funds to cover Chapman's bad check, and attempted to pay off the mortgage with $38,000 of the remaining funds. Great American, however, refused Eglin's offer. In early August 1974, a $43,500 letter of credit issued to Chapman by Tidwell against Eglin's credit was called and required immediate payment. Tidwell used the remaining funds credited to Eglin's account by Merchants to pay this obligation. The payments on Chapman's bad check and his letter of credit formed the basis for Count Nine. Finally, after another intervening unsuccessful attempt, Tidwell was able to secure the first mortgage for $41,562.61 which he paid out of Eglin's funds without approval or knowledge of the board of directors. This use of the bank's money formed the basis for Count Ten.

Tidwell urges two grounds for reversal of his conviction on Counts Nine and Ten: (1) that the trial judge's instruction concerning the "natural and probable consequences" of one's acts shifted the burden of proof to the defendant on the issue of intent, and (2) that the exclusion of evidence showing that the bank later foreclosed on the mortgage obtained by Tidwell seriously impaired his defense by not letting the jury know the actual consequences of Tidwell's acts. We find no merit to either of these arguments.

II. THE "NATURAL AND PROBABLE CONSEQUENCES" INSTRUCTION

Tidwell claims that error occurred as a result of the following portion of the trial judge's instructions to the jury:

It is reasonable to infer that a person ordinarily intends the natural and probable consequences of his knowing acts. The jury may but is not required to draw the inference and find that the accused intended all of the consequences which one standing in like circumstances and possessing like knowledge should reasonably have expected to result from any intentional act or conscious omission. Any such inference drawn is entitled to be considered by the jury in determining whether or not the Government has proved beyond a reasonable doubt that the defendant possessed the requisite criminal intent. (T. 542)

This charge was duly objected to at the trial, preserving the point for appellate review.

This instruction bears little resemblance to that which was first condemned in Mann v. United States, 319 F.2d 404 (5th Cir. 1963), cert. denied, 375 U.S. 986, 84 S.Ct. 520, 11 L.Ed.2d 474 (1964), as impermissibly shifting the burden of proof to the defendant. In Mann, the trial judge had given the following charge:

"It is reasonable to infer that a person ordinarily intends the natural and probable consequences of acts knowingly done or knowingly omitted. So unless the contrary appears from the evidence, the jury may draw the inference that the accused intended all the consequences which one standing in like circumstances and possessing like knowledge should reasonably have expected to result from any act knowingly done or knowingly omitted by the accused."

Id. at 407. We held that the words "So unless the contrary appears from the evidence" shifted the burden of proof from the prosecution to the defendant to prove lack of intent. Id. at 409. No comparable language was included in the instant charge.

In addition to the lack of any burden shifting language, the instruction given falls within exceptions to the Mann rule developed by post-Mann cases in this Circuit. By repeatedly reminding the jury that the government bears the burden of proving beyond a reasonable doubt every element of the crime, the trial judge included adequate "curative provisions", in compliance with United States v. Jenkins, 442 F.2d 429, 438 (5th Cir. 1971). Also, testing the charge "as a whole and not by a single isolated sentence", we find no reversible error. United States v. Duke, 527 F.2d 386, 392-93 (5th Cir. 1976), cert. denied, 426 U.S. 952, 96 S.Ct. 3177, 49 L.Ed.2d 1190. Finally, the instant charge follows almost verbatim the charge which we approved in United States v. Wilkinson, 460 F.2d 725, 733 (5th Cir. 1972). Instead of using only the language approved in Wilkinson, "(t)he jury may draw the inference that the accused intended all of the consequences . . . ", the trial judge here added that the jury "may but it is not required to draw the inference . . . " These additional words gave further assurance that the jury would understand the burden of proof to which the prosecution is held. Although we do not now require an instruction more carefully worded than that set forth in Wilkinson, we favor the instant charge as a more effective way of avoiding the abuse condemned in Mann.

We hold that the instant charge did not shift the burden of proof on the issue of intent. The trial judge was careful to avoid such a result.

III. EXCLUSION OF THE FORECLOSURE PROCEEDINGS

During the trial, Tidwell's counsel offered as evidence certified copies of the complaint and final judgment in a mortgage foreclosure action by the Eglin National Bank against Marvin Chapman. The trial judge, conceding relevance, sustained an objection to the introduction of this evidence on the ground that it was repetitious. T. 420-21. On appeal, Tidwell argues that exclusion of the evidence as to the mortgage foreclosure action was reversible error because it crippled his defense on the only issue in dispute with regard to the misapplication counts, namely, whether he misapplied the funds with an intent to injure and defraud the bank.

In United States v. Mann, 517 F.2d 259 (5th Cir. 1975), cert. denied, 423 U.S. 1087, 96 S.Ct. 878, 47 L.Ed.2d 97 (1976), we identified the four essential elements of a violation of 18 U.S.C. § 656:

(1) that the accused was an officer, director, etc. of a bank,

(2) that the bank was connected in some way with a national or federally insured bank,

(3) that the accused wilfully misapplied the money, funds, etc. of said bank, and

(4) that the accused acted with intent to injure and defraud said bank. ²

It is well established that "the requisite intent can be inferred from the facts and circumstances shown at trial". United States v. Tokoph, 514 F.2d 597, 603 (10th Cir. 1975). This intent exists "if a person acts knowingly and if the natural result of his conduct would be to injure or defraud the bank even though this may not have been his motive". United States v. Schmidt, 471 F.2d 385, 386 (3d Cir. 1972). Furthermore, and as the trial judge properly instructed the jury,

An intent to injure or defraud . . . is not inconsistent with a desire for the ultimate success and welfare of the bank . . . A wrongful misapplication of funds, even if made in the hope or belief that the bank's welfare would ultimately be promoted is none the less a violation of the statute, if the necessary effect is or may be to injure or defraud the bank.

Golden v. United States, 318 F.2d 357, 361-62 (1st Cir. 1963), citing Galbreath v. United States, 257 F. 648, 656 (6th Cir. 1918). ³ In accord with these principles, evidence that a Section 656 violation eventually worked to the bank's advantage does not negate the requisite intent:

The ultimate or future possibility or probability of benefit to the bank is not a defense to a misapplication of funds at the time of purchase of the loans. The...