United States v. Lee

• Decision Date: 01 January 1882
• Citation: 12 F. 816
• Parties: UNITED STATES v. LEE.
• Court: U.S. District Court — Northern District of New York

12 F. 816

UNITED STATES v. LEE.

United States Circuit Court, N.D. New York.

June Term, 1882

COXE D.J., (charging jury.)

The prisoner at the bar stands indicted for having done various acts in violation of section 5209 of the Revised Statutes of the United States, while he was acting as president of the First National Bank of the city of Buffalo. The indictment is framed under this section, and the effort on the part of the prosecution and the defence has been, on the one side, to establish the guilt, and, on the other, the innocence, of the defendant, having reference solely to the crimes there enumerated. Although it has been read in your presence many times, it seems to me important that at the outset of your deliberations you should understand thoroughly the law as applicable to this case in its full scope and meaning. With that view, I desire to call your attention again to this section of the law:

'Every president, director, cashier, teller, clerk, or agent of any association, who embezzles, abstracts, or wilfully misapplies any of the moneys, funds, or credits of the association; or who, without authority from the directors issues or puts in circulation any of the notes of the association; or who, without such authority, issues or puts forth any certificate of deposit, draws any order or bill of exchange, makes any acceptance, assigns any notes, bond draft, bill of exchange, mortgage, judgment, or decree; or who makes any false entry in any book, report, or statement of the association with intent, in either case, to injure or defraud the association or any other company, body politic or corporate, or any individual person, or to deceive any officer of the association, or any agent appointed to examine the affairs of any such association; and every person who with like intent aids or abets any officer, clerk, or agent in any violation of this section, shall be deemed guilty of a misdemeanor,' etc.

The defendant is indicted under the first clause of the section, which I have read. I do not understand that it is insisted upon either side that the subsequent parts of the statute are applicable in any view to the case before you. The first sentence, or rather the first clause, of this section provides for three distinct and separate offences: the crime of embezzlement, the crime of abstraction, and the crime of wilful misapplication of the moneys, funds, or credits of the bank. The defendant is not indicted for putting in circulation any of the notes of the association, or for issuing any certificate of deposit, drawing any order or bill of exchange, making any acceptance, assigning any note, bond, draft, bill of exchange, mortgage, judgment or decree without authority from the board of directors of the bank; nor is he indicted for making any false entry in any book or in any report. And, gentlemen, it may be proper at this time to call your attention to the fact-- because the subject has been discussed somewhat by counsel-- that he is not indicted because, while acting as president of the bank, certain of its customers, himself among the rest, borrowed from the bank more than 10 per cent. of the capital stock, in violation, as the prosecution insists, of section 5200 of the Revised Statutes; nor is he indicted for discounting the paper of his relatives and friends. Whatever views we may entertain as to the legality and propriety of such conduct, his action in this respect is not called in question by this indictment. I should, perhaps, say further that the defendant is not here charged with crime in allowing his reserve funds to decrease or become less than the amount required by law, nor is he charged with wrecking the bank. The proof bearing upon all of these alleged infractions and violations of the law is important, however, upon the question of intent.

It is not necessary, in order to find the defendant guilty of any of the crimes charged, that you should find that the bank failed by reason of his acts. A cashier, president, or director of a national bank may abstract and misapply its funds without any disaster such as has been detailed in this case occurring to the bank. Bearing in mind, then, that this indictment is framed solely, as I understand it, under the first clause of the section quoted, and recurring to that clause for a moment, it will be perceived that it enumerates as stated, three distinct and separate crimes. If upon this evidence you find the defendant guilty of any one of them; if you find that he has taken the funds of the bank in violation of law, no matter how small the amount may have been,-- it is sufficient to sustain a verdict of guilty. These offences are stated disjunctively in the statute: 'Any president, director, or cashier who embezzles,' or 'who abstracts,' or 'who willfully misapplies.' A casual reading of this section might induce an unobserving person to assume that the three words were synonymous, or nearly so; but there is a distinction to which I desire very briefly to call your attention. The crime of embezzlement is a species of larceny, and is applicable to the stealing of property by clerks, agents, servants, parties acting in fiduciary capacities, and, under this statute, by a president, cashier, or director of a national bank. In order to constitute this crime it is necessary that the property embezzled should come lawfully into the hands of the party embezzling, and by virtue of the position of trust he occupies to the person whose property he takes. It is distinguishable from the crime of larceny in this respect, that the property comes lawfully into his possession, and is unlawfully taken by him. In the crime of larceny, on the contrary, it is unlawfully taken and retained. The crime of abstraction, made so by the statute, applies to cases where one for his own benefit takes the property of another; but it is not necessary that any position of trust should exist between the parties; nor is it necessary that the property should come lawfully into the possession of the person abstracting it. The other crime is the wilful misapplication of the funds, credits, and money of the bank; and by the word 'wilfully,' the congress meant 'designedly'-- where one of the persons mentioned in the section designedly and knowingly misapplies the property of the bank. It is not necessary that the party who misapplies should derive any benefit from the transaction. It was the intention of congress to make criminal the misapplication and the conversion of the funds of national banking associations, without regard to whether or not the party so misapplying received any of the misapplied funds, or other advantage, directly or indirectly. If you come to the conclusion that the property, money, and funds of this bank were wilfully misapplied, it is not necessary, in order to establish guilt, that any benefit should have come to this defendant; and that view of the statute is borne out by a reference to the subsequent sentence in it having reference to intent, to which I will call your attention more particularly in a moment. It provides that these acts must, each of them, be done with intent to defraud or injure the association. When the word 'defraud' is used, it necessarily implies that advantage comes to the party defrauding, and corresponding damage to the party who is defrauded; but the...