United States v. Matsinger

Decision Date20 September 1951
Docket NumberNo. 10354.,10354.
Citation191 F.2d 1014
PartiesUNITED STATES v. MATSINGER.
CourtU.S. Court of Appeals — Third Circuit

John M. Smith, Jr., Philadelphia, Pa., for appellant.

Thomas J. Curtin, Philadelphia, Pa. (Gerald A. Gleeson, U. S. Atty., Philadelphia, Pa., on the brief), for appellee.

Before BIGGS, Chief Judge, and MARIS and STALEY, Circuit Judges.

BIGGS, Chief Judge.

The appellant, Matsinger, executive vice-president of the Lafayette Trust Company of Easton, Pennsylvania, an insured bank within the meaning of Section 264(c), Title 12, U.S.C. (1940 ed.), was indicted, tried and convicted for violation of Section 592, Title 12, U.S.C. (1940 ed.)1 for misapplication of funds of the Bank. The court below in its opinion at 92 F.Supp. 516, et seq., has stated most of the facts which are necessary to understand the case. We shall merely recapitulate the contents of that opinion here and refer to a few additional circumstances which we deem pertinent. We shall, of course, take the facts and the inferences to be drawn therefrom most strongly against Matsinger and in support of the jury's verdict.

Backer and Opp kited 509 checks over a period from September 1946 to February 28, 1947, the kite being based on the short distance between Easton and Bethlehem, Pennsylvania, about twelve miles. Opp gave Backer checks, signed by Opp in blank and drawn on his, Opp's, account at the Bethlehem National Bank at Bethlehem. Backer cashed or deposited these checks at the Lafayette Bank delivering them to two tellers at that Bank, who in turn proceeded to give Backer cash or credit therefor. Backer would then take cash or checks drawn to Opp's order to the Bethlehem Bank and make deposits to Opp's account there. Three or four days would be required for the checks drawn on Opp's account at the Bethlehem Bank and deposited at the Lafayette Bank to clear through the Federal Reserve Bank at Philadelphia, whereas it would take only a short time to drive the twelve miles from Easton to Bethlehem to make deposits, sometimes of the very money drawn from the Lafayette Bank, to Opp's account in the Bethlehem Bank.

It was not shown by the evidence that Matsinger received any profit from the kiting. He testified that about a week before Christmas he became aware that the Lafayette Bank was paying out money to Backer on Opp's uncollected checks; that he immediately called Backer and told him that he must stop drawing checks against uncollected items, and that after Christmas 1946 he believed that Backer had ceased the practices but that toward the middle of February, 1947 he discovered that this was not true. Matsinger testified that he called Backer again and informed him that the objectionable practice would have to terminate but that he, Backer, might cash a few small checks to bring the transactions to a close as conveniently as possible. Matsinger stated that from February 13 until February 21, 1947, "I would allow him Backer to cash a check in a smaller amount each day." This, said Matsinger, effected a reduction in the amount of checks being cashed by Backer at the Lafayette Bank to about $5,000 a day. Matsinger went on to say, "* * * I was telling him that he could cash a check in a smaller amount each day, and telling the tellers to cash a check in the smaller amount each day, still feeling that my collateral or the collateral the bank held put me in a perfectly safe position if any of these checks were returned unpaid."

Some very large checks were cashed by Backer within the period indicated, but Matsinger insisted that he did not authorize these payments; that the two tellers, hereinbefore referred to, would cash checks larger than he authorized, they, like he, being deceived by Backer. The deceit, according to Matsinger, consisted of Backer bringing him a check or checks. He, Matsinger, would authorize the tellers to pay them. Backer would then take a larger check or larger checks to the tellers and inform them that Matsinger had authorized the payment and would receive cash or credit therefor.

Beckel, President of the Bethlehem National Bank, telephoned Matsinger in December 1946 and informed him that kiting transactions were going on between the two banks. In February 1947 Beckel again telephoned Matsinger and repeated his warning. At various times during the period involved employees of the Lafayette Bank informed Matsinger of the Backer-Opp transactions. Matsinger is a former bank examiner and a man experienced in banking practices. Matsinger went so far as to admit in the language last quoted that he had in mind the possibility of some of Opp's checks being returned unpaid. The tellers, to whom we have referred, testified in substance that they were acting pursuant to Matsinger's orders in cashing large checks, at least from February 13, 1947 on. Matsinger testified that he was deceived by Backer but the jury was at liberty to reject his testimony in this regard. The tellers testified that they believed that check kiting between Backer and Opp was going on and informed Matsinger of this. Bearing in mind that a case may not be submitted to a jury when the actions of the accused are as consistent with innocence as with guilt and considering also that Matsinger is charged not with improvident or negligent banking practices but with intent to defraud the institution which he served, we conclude nonetheless that the case was properly one for submission to the jury. The question was whether or not Matsinger was guilty of wilful misapplication of funds with intent to defraud the Lafayette Bank.2

We find it necessary, however, to reverse the judgment of conviction for the reasons set out hereinafter. A reading of the court's charge to the jury shows that the learned trial judge did not properly point out to the jury the meaning of the phrases of the statute respecting wilful misapplication of funds with intent to defraud the bank.3 A reading of that portion of the charge quoted below4 demonstrates the accuracy of our statement.

In United States v. Britton, 107 U.S. 655, 666, 2 S.Ct. 512, 522, 27 L.Ed. 520, the phrase, "wilful misapplication" in the statute was defined to be "a misapplication for the use, benefit, or gain of the party charged, or of some company or person other than the banking association", and to constitute the offense it was stated that there must be a conversion to the use of the offender, or of someone else, of the money or credit of the bank...

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  • United States v. Costello
    • United States
    • U.S. Court of Appeals — Second Circuit
    • April 5, 1955
    ...as consistent with the defendant's innocence as with his guilt, Parnell v. United States, 10 Cir., 64 F.2d 324, 329; United States v. Matsinger, 3 Cir., 191 F.2d 1014, 1016; Candler v. United States, 5 Cir., 146 F.2d 424, 426; Isbell v. United States, 8 Cir., 227 F. 788, 792; or that a tria......
  • United States v. Michael
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    • U.S. District Court — District of New Jersey
    • August 17, 1978
    ...U.S. at 592, 14 S.Ct. at 938. The Third Circuit has recognized the continuing vitality of these precepts in United States v. Matsinger, 191 F.2d 1014 (3d Cir. 1951) (Biggs, J.), and it has approvingly discussed at length modern cases (e. g., United States v. Gens, 493 F.2d 216, 221-222 (1st......
  • U.S. v. McKee
    • United States
    • U.S. Court of Appeals — Third Circuit
    • October 29, 2007
    ...their failure to file accurate returns was equally consistent with innocent activity. Donatos' Br. at 28 (citing United States v. Matsinger, 191 F.2d 1014, 1016 (3d Cir.1951) ("[A] case may not be submitted to a jury when the actions of the accused are as consistent with innocence as with g......
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    • U.S. District Court — Southern District of New York
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    ...Cir. 1954), aff'd 348 U.S. 147, 75 S.Ct. 194, 99 L.Ed. 192; Yoffe v. United States, 153 F.2d 570 (1 Cir. 1946); United States v. Matsinger, 191 F.2d 1014, 1016 (3 Cir. 1951); Paul v. United States, 79 F.2d 561, 563-564 (3 Cir. 1935); Yusem v. United States, 8 F.2d 6, 8 (3 Cir. 1925); Chicco......
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