United States v. Pyle

• Decision Date: 07 October 1921
• Docket Number: 2611.
• Citation: 279 F. 290
• Court: U.S. District Court — Southern District of California
• Parties: UNITED STATES v. PYLE et al.

279 F. 290

UNITED STATES v. PYLE et al.

No. 2611.

United States District Court, S.D. California, Southern Division.

October 7, 1921

Robt. O'Connor, U.S. Atty., and W. Fleet Palmer, Sp. Asst. U.S Atty., both of Los Angeles, Cal.

Fredericks & Hanna, of Los Angeles, Cal., for defendant Pyle.

W. T Helms and Fred H. Thompson, both of Los Angeles, Cal., for defendant Conner.

BLEDSOE District Judge (after stating the facts as above).

Defendants Pyle and Conner were prosecuted under section 5209 of the Revised Statutes for a misapplication of the funds of the National Bank & Trust Company of Pasadena. Defendant Pyle was charged as an officer of the bank, and defendant Conner as an aider and abettor of Pyle. The statute, being intended primarily to protect national banking institutions against the peculations and malfeasances of their officers and employes (Coffin v. U.S., 162 U.S. 664, p. 669, 16 Sup.Ct. 943, 40 L.Ed 1109), provides, first, that 'every president, director, cashier, teller, clerk or agent' of the bank, who 'embezzles, abstracts or willfully misapplies any of the moneys, funds or credits' of the bank, 'with intent * * * to injure or defraud the association (bank) or any other company,' etc., '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.

There is no general statute, to which my attention has been directed, making it a federal offense to commit a larceny or pilfering of the assets of a national bank. Neither is there any general statute giving to federal courts the jurisdiction to punish the obtaining of the property of a national bank through fraudulent representations. Such matters are left to the concern and disposition of the various state governments, which in the exercise of their respective sovereignties enact and enforce general laws intended to preserve the peace, good order, and rights of property of society in general. I am persuaded, therefore, that the aim and intent of this statute, in creating a federal offense, was to make it an offense cognizable by the federal courts only in the event that the abstraction or misapplication of the funds of a national bank should be committed by an officer or attache thereof.

In that event, therefore, there is no crime committed under this statute, unless the act charged be committed by one of the specific persons named in the statute, that is, by one of the officers or attaches of the bank; and in order further to protect the bank, but purely as incidental to the main purpose and intention of the statute, if such officer of the bank be aided and abetted by another, one on the outside, or even by another bank official, that other, under the statute, will also be subject to punishment as for such aiding and abetting. In this wise, irrespective of the things actually done or the results actually brought about, if there has been no crime committed by the officer of the bank, there is no crime known to the federal law committed by one not connected with the bank. In other words, there can be no incident without the principal; there can be no aiding and abetting with respect to the misapplication of the funds of a national bank, of which this court under this statute has jurisdiction, if there has been no misapplication by an officer of the bank.

In this case the charge was that Conner aided and abetted Pyle, an officer of the bank, in misapplying its funds. The jury have acquitted Pyle, which is a legal demonstration of his innocence of the crime charged. It is a conclusive determination that there was no misapplication by him of the funds of the bank with intent to defraud. That being so, there was no crime under this statute which Conner could or did aid and abet; and in that wise the determination of the innocence of Pyle determines the nonexistence of any crime subject to the jurisdiction of this court committed by Conner.

These conclusions, if sound, require the court to grant the motions in arrest of judgment, and asking that the verdict convicting Conner be set aside upon the grounds and for the reasons adverted to hereinabove. That it is the correct vies of the situation, I am persuaded, not only from the language and obvious purpose of the statute itself, but also from adjudicated cases which have construed the statute in one way or another.

Principal among these is the case of Coffin v. United States, 162 U.S. 664 et seq., 16 Sup.Ct. 943, 40 L.Ed. 1109. In that case, a man named Haughey, as president of a national bank, was indicted with others not connected with the bank (Coffin v. U.S., 156 U.S. 432, 433, 15 Sup.Ct. 394, 39 L.Ed. 481) for a misapplication of the bank's funds. Coffin, not connected with the bank, was indicted as an aider and abettor, the same as Conner herein. He only, apparently, was convicted. The disposition of the case as to Haughey does not appear. All through the long discussion of the case, extending over more than 20 pages, the Supreme Court considers the propriety of the instructions given and refused with respect to the necessity of a criminal intent and purpose on the part of Haughey, the president, in order that the defendant Coffin, the aider and abettor, might be lawfully convicted. If, as is urged herein, the aider and abettor may be convicted, even though the bank official be acquitted, the Supreme Court could easily have saved itself much trouble and long discussion by merely announcing that fact, and in that wise refraining from entering into a discussion of the question of the criminal intent and purpose on the part of Haughey. If it mattered not whether Haughey were innocent or guilty, then it mattered not whether he had a criminal intent. The only criminality necessary to have been shown would have been the criminality of the aider and abettor, Coffin. That is substantially the contention of the government herein, that the only criminality necessary to be shown in order to justify the conviction of Conner is the criminality of Conner, conclusively determined against him by the adverse verdict of the jury.

The Supreme Court's discussion of the case, however, shows that it considered at all times that Haughey's guilty purpose and intent must have accompanied the guilty purpose and intent of Coffin, in order that the act of the latter might, under the statute, have been rendered unlawful. For instance (162 U.S.on page 667, 16 Sup.Ct. 945, 40 L.Ed. 1109), in denying the necessity for the existence of a 'common' purpose on the part of the president and the abettor, the court nevertheless states that it is required 'that there should be misapplication of the moneys of the bank with a joint intent to 'injure or defraud," etc. 'In accord with this view the court properly instructed the jury that there must have existed in the minds of both Haughey and the defendants the wrongful intent stated in the law. ' This announcement of the Supreme Court is utterly irreconcilable with the theory that Haughey could have been innocent-- that is, devoid of wrongful intent-- and yet his aider and abettor guilty. So on page 669 of the same decision (16 Sup.Ct. 946, 40 L.Ed. 1109) the court says:

'It is evident that no matter how active the cooperation of third persons may have been in the wrongful act of a bank officer or agent, such third person is required to be charged as an aider and abettor in the offense and prosecuted as such. The primary object of the statute was to protect the bank from the acts of its own servants. As between officers and agents of the bank and third persons cooperating to defraud the bank, the statute contemplates that a bank officer shall be treated as a principal offender. In every criminal offense there must, of course, be a principal, and it follows that, without the concurring act of an officer or agent of a bank, third persons cannot commit a violation of the provisions of section 5209. ' (Italics mine.)

The language last quoted is demonstrative of the soundness of Conner's contention that, Pyle having been acquitted of all crime, there could be no aiding and abetting on his part. On page 670 of 162 U.S. (16 Sup.Ct. 943, 40 L.Ed. 1109) the court proceeds at some length to answer the contention that there was an apparent want of identity between the crime alleged to have been committed by Haughey, the president, and Coffin, the aider and abettor, and that such want of identity was fatal to the indictment. The court answers this by showing there was no such want of identity; but if it...