United States v. Cawthon, 7024.

• Decision Date: 25 October 1954
• Docket Number: No. 7024.,7024.
• Citation: 125 F. Supp. 419
• Parties: UNITED STATES of America, v. Warren Sanders CAWTHON, James B. White and Buel Lanier Trapnell.
• Court: U.S. District Court — Middle District of Georgia

125 F. Supp. 419

UNITED STATES of America, v. Warren Sanders CAWTHON, James B. White and Buel Lanier Trapnell.

No. 7024.

United States District Court M. D. Georgia, Macon Division.

October 25, 1954.

Frank O. Evans, U. S. Atty., Floyd M. Buford, Jos. H. Davis, Asst. U. S. Attys., Macon, Ga., for the United States.

W. M. Redman, Jackson, Ga., Harris, Russell, Weaver & Watkins, Macon, Ga., H. D. Russell and T. Reese Watkins, Macon, Ga., of counsel, for defendants White and Trapnell.

Alfred D. Fears, Jackson, Ga., Martin, Snow & Grant, T. Baldwin Martin, Macon, Ga., of counsel, for defendant Cawthon.

DAVIS, Chief Judge.

The grand jury returned a seven-count indictment against the defendants, Warren Sanders Cawthon, James B. White, and Buel Lanier Trapnell.

Counsel for the defendants White and Trapnell filed on their behalf motions to dismiss the indictment in the case on the grounds of insufficiency. The motions came on for hearing and the Court heard extensive arguments by counsel for both sides.

The first count of the indictment is a conspiracy count and the others are substantive counts. For reasons of convenience and clarity the Court prefers to deal with the substantive counts first.

These counts allege violations of Section 656, Title 18, U.S.C. and each violation, except for dates, amounts and names is alleged in identical language. For the purpose of this opinion Count II is set forth verbatim. There is no material variance in the succeeding counts. Count II, is as follows:

"On or about the 6th day of November, 1952, in the Macon Division of the Middle District of Georgia, Warren Sanders Cawthon, being then and there an officer and employee, to-wit: Cashier, of the Jackson National Bank, Jackson, Georgia, a National bank, and one, James B. White, did unlawfully and willfully misapply and cause to be misapplied, certain moneys, funds, and credits of the Jackson National Bank, and moneys, funds, assets and securities entrusted to the care and custody of said Jackson National Bank, to-wit: the sum of $7,987.00, in that the said James B. White did execute a certain check, dated November 3, 1952, No. 2293 made payable to Farmers Bank, drawn on the Jackson National Bank, Jackson, Georgia, in the sum of $7,987.00, signed White Pontiac Company, J. B. White, and the said Warren Sanders Cawthon being then and there an officer and employee of said Jackson National Bank, at the request of defendant, James B. White, did honor, accept and pay said check, when in truth and in fact, there was not at said time sufficient funds on deposit in the account of White Pontiac Company and J. B. White at said Jackson National Bank to pay said check."

It should first be noted that the indictment does not charge the defendants with embezzlement, theft or purloining or any crime known at common law. Nowhere in the allegations are the defendants charged with the intent to defraud or injure the bank. They are merely charged with willfully misapplying the funds of a national bank. The factual allegations only allege the drawing and cashing of an overdraft without setting forth any surrounding circumstances such as would make this action a violation of the statute. The mere drawing and cashing of an overdraft, without more, is not a criminal offense under this section. U. S. v. Heinze, C.C., 161 F. 425. Under U. S. v. Britton, 107 U.S. 655, 669, 2 S.Ct. 512, 524, 27 L.Ed. 520, a mere allegation that the defendant willfully misapplied funds of the bank is not sufficient. The addition of the word "unlawfully" would not cure this defect. In the Britton case, the Supreme Court said "The words `willfully misapplied' are, so far as we know, new in statutes creating offenses, and they are not used in describing any offense at common law. They have no settled technical meaning like the word `embezzle' as used in the statutes, or the words `steal, take, and carry away,' as used at common law. They do not, therefore, of themselves fully and clearly set forth every element of the offense charged. It would not be sufficient simply to aver that the defendant `willfully misapplied' the funds of the association. This is well settled by the authorities we have already cited. There must be averments to show how the application was made and that it was an unlawful one."

This principle has recently been restated in U. S. v. Matsinger, 3 Cir., 191 F.2d 1014. In a similar vein is the decision in U. S. v. Crummer, 10 Cir., 151 F.2d 958, 962, which held: "Where a statute creating an offense sets forth fully, directly, and expressly all of the essential elements necessary to constitute the crime intended to be punished, it is sufficient if the indictment charges the offense in the words of the statute. But where the statute is in general terms and does not set out expressly and with certainty all of the elements necessary to constitute the offense, the indictment must descend to particulars and charge every constituent ingredient of which the crime is composed."

There are other holdings to the effect that "intent to defraud" is an essential element of the offense of willful misapplication, Britton v. U. S., supra, and must be alleged. McCallum v. U. S., 8 Cir., 247 F. 27, 35; McKnight v. U. S., 6 Cir., 111 F. 735.

The section under which this indictment is brought is a 1948 revision of former Section 592, Title 12, U.S.C. The above cited cases involved charges which arose under the old section. The United States contends that these holdings do not apply to the revised statute, which omits the words "intent to defraud", and in support of this position relies on the cases of U. S. v. Balint, 258 U.S. 250, 42 S.Ct. 301, 66 L.Ed. 604, and U. S. v. Behrman, 258 U.S. 280, 42 S.Ct. 303, 66 L.Ed. 619. This contention, however, is conclusively answered by the Supreme Court in Morissette v. U. S., 342 U.S. 246, 72 S.Ct. 240, 249. There, Justice Jackson speaking for the Court and interpreting a similar statute, 18 U.S.C § 641, said:

"Congress, therefore, omitted any express prescription of criminal intent from the enactment before us in the light of an unbroken course of judicial decision in all constituent states of the Union holding intent inherent in this class of offenses, even when not expressed in a statute."

In that case it was urged that while intent might be a necessary element of embezzlement, stealing or purloining, as they were crimes known at common law, it should not be held an essential element of the offense of "knowingly converting". This is comparable to the grouping of willful misapplication with the offenses of embezzlement, abstraction and purloining in Section 656. The Court answered this contention, as follows: "We find no other purpose in the 1948 re-enactment than to collect from scattered sources crimes so kindred as to belong in one...