1. The counts of an indictment against the president of a
national banking association for making such a false entry on its
books as is punishable under sec. 5209 of the Revised Statutes are
sufficient if they are in the form hereinafter set forth,
post, p.
107 U. S. 656,
as the offense is thereby alleged in apt terms, and with the
requisite averments of time and place.
2. The counts which charge his fraudulent purchase of shares of
the capital stock of the association are bad if they either fail to
state for whose use the purchase was made or if they state that it
was made for the use of the association or if they do not aver that
it was not made in order to prevent loss on some previously
contracted debt.
3. The counts which charge him with having willfully misapplied
the funds of the association should aver that he did so for the
benefit of himself or some person or body other than the
association, and with intent to injure or defraud the association
or some other person or body corporate.
4. The counts which charge his fraudulent purchase of the shares
of stock, and allege that they were by him held
"in trust for the use of said association, and that said shares
were not purchased as aforesaid in order to prevent loss upon any
debts theretofore contracted with said association in good
faith"
do not allege with sufficient certainty an offense under said
sec. 5209.
5. The purchase of stock in violation of sec. 5201, if made with
intent to defraud, and by one or more of the officers of the bank
named in said sec. 5209, is not a crime punishable under the latter
section.
Section 5209 of the Revised Statutes of the United States is as
follows:
"Every president, director, cashier, teller, clerk, or agent of
any [national banking] association who embezzles, abstracts, or
willfully 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,
or assigns any note, bond, draft, bill of exchange, mortgage,
judgment, or decree, or
Page 107 U. S. 656
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 the 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, and shall be imprisoned not less than five
years nor more than ten."
An indictment based on this section was, on January 20, 1879,
found against defendant, James H. Britton, in the District Court of
the United States for the Eastern District of Missouri. It
contained one hundred and nineteen counts. The first count charged
as follows:
"That James H. Britton, late of said district, on the 30th day
of June, A.D. 1876, at said district, being then and there
president of a certain national banking association then and there
known and designated as the 'National Bank of the Missouri, in St.
Louis,' which said association had been theretofore created and
organized under and by virtue of an act of Congress entitled 'An
act to provide a national currency secured by a pledge of United
States bonds, and to provide for the circulation and redemption
thereof,' approved June 3, A.D. 1864, and which said association
was then and there acting and carrying on a banking business in the
City of St. Louis, in said district, under the said act of Congress
and the acts amendatory thereof, did make in a certain book then
and there belonging to and in use by the said association in
transacting its said banking business, and then and there
designated and known as 'Profit and Loss, No. 6,' a certain entry
to the credit of a certain account known as profit and loss, which
said entry was then and there in the words and figures following;
that is to say:"
" Richard L. Dickson:"
" 182 days' int., 8 percent, 132,673.49, to July 1, '76, . . .
5,365.88"
"and which said entry, so far as aforesaid made in said book,
then and there purported to show, and did, in substance and
effect,
Page 107 U. S. 657
indicate and declare that the sum of $5,365.88 was then and
there received by said association on account of interest then and
there due and payable to said association by one Richard L.
Dickson."
"And the jurors aforesaid, on their oaths aforesaid, do further
present that the said entry so made as aforesaid was then and there
false in this, that the said sum of $5,365.88 was not then and
there received by said association on account of interest then and
there due and payable to said association from the said Richard L.
Dickson, as he, the said James H. Britton, then and there well
knew, and that the said entry, so made as aforesaid, was then and
there false in this, that the said sum of $5,365.88 was not then
and there received by said association upon any account from any
source, as he, the said James H. Britton, then and there well knew,
and that the said false entry was then and there made as aforesaid
with the intent then and there on the part of him, the said James
H. Britton, to deceive any agent who might be thereafter appointed
by the Comptroller of the Currency to examine the affairs of said
association, contrary to the form of the statute of the United
States in such case made and provided, and against their peace and
dignity."
The thirty-four counts next following, numbered from 2 to 35,
inclusive, charged, in the same language, the making of similar
false entries in the same book with the same intent.
The thirty-sixth count was in all respects similar to the
preceding 35 counts except that it omitted the averment that the
false entry was made with the intent "to deceive any agent who
might be thereafter appointed by the Comptroller of the Currency to
examine the affairs of said association," and in lieu thereof
alleged it to be with intent "to injure and defraud the said
association and certain persons to said jurors unknown."
The thirty-seventh count charged as follows:
"That the said James H. Britton, late of said district, on the
second day of April, in the year of our Lord one thousand eight
hundred
Page 107 U. S. 658
and seventy-seven at said district, being then and there
president of a certain national banking association then and there
known and designated as the 'National Bank of the Missouri, in St.
Louis,' which said association had been theretofore created and
organized under and by virtue of an act of Congress entitled 'An
act to provide a national currency secured by a pledge of United
States bonds, and to provide for the circulation and redemption
thereof,' approved June third, in the year of our Lord one thousand
eight hundred and sixty-four, and which said association was then
and there acting and carrying on a banking business in the City of
St. Louis, in said district, under the said act of Congress and the
acts amendatory thereof, did pay to a certain person, to the jurors
aforesaid unknown, a large sum of money, to-wit, twenty-four
hundred dollars, out of the moneys and funds then and there
belonging to and the property of said association, in the purchase
by him, the said James H. Britton, from said unknown person, of a
large number, to-wit, forty certain shares of the capital stock of
said association, which said shares of stock were then and there
represented upon the books of said association to be the property
of one Francis Fisher."
"And the jurors aforesaid, on their oaths aforesaid, do further
present that the said James H. Britton, presidents as aforesaid,
did then and there, by means of the payment aforesaid, in manner
and form aforesaid, willfully misapply the said sum of twenty-four
hundred dollars of the moneys and funds as aforesaid of said
association, with intent then and there, on the part of him, the
said James H. Britton, to injure and defraud the said association
and certain persons, to the jurors aforesaid unknown, contrary to
the form of the statute of the United States in such case made and
provided, and against their peace and dignity."
The next following nineteen counts, numbered from 38 to 56,
inclusive, are similar to count 37, and need not be set out.
The next succeeding counts, numbered from 57 to 76, inclusive,
but excepting the seventy-fourth, are similar to count 37, except
that they omit the averment that the misapplication was made with
intent "to injure and defraud the said
Page 107 U. S. 659
association and certain persons to the jurors aforesaid
unknown." These counts aver no intent whatever. The seventy-fourth
count is similar to the thirty-seventh.
The next twenty counts, numbered from 77 to 96, inclusive, are
in all respects similar to count 37 except that they contain the
following additional averment, forming the conclusion of the first
clause of the account, namely
"and which said shares of stock, so purchased as aforesaid, were
then and there held by him, the said James H. Britton, in trust for
the use of said association, and which said shares of stock were
not purchased as aforesaid in order to prevent loss upon any debt
theretofore contracted with said association in good faith."
The next twenty counts, numbered from 97 to 116, are all similar
to count 96 except that they omit the averment that the
misapplication of the funds of the association was with the intent
"to injure and defraud the said association and certain persons to
the jurors aforesaid unknown." These counts charge no intent.
The count numbered 117 was similar to count 36, and count
numbered 118 was similar to count 1.
As no division of opinion respecting count numbered 119 is
certified, it is unnecessary to notice that count.
The defendant demurred to the indictment. By order of the
district court, the indictment was, on May 16, 1879, remitted and
transferred to the next regular term of the United States Circuit
Court for the Eastern District of Missouri, at which term the cause
was heard upon the demurrer. Upon such hearing, the following
questions arose, upon which the judges of the circuit court were
divided and opposed in opinion, namely:
1st, Whether it was necessary, in the counts of said indictment
charging a fraudulent purchase by the defendant of certain shares
of the capital stock of said association, to state for whose use
the purchase was made, and whether, where it is charged in the
indictment that the purchase of stock was made for the use of the
bank, such averment vitiates the indictment.
2d, Whether it was necessary in the said counts to allege
Page 107 U. S. 660
that the purchase of stock was not made in order to prevent loss
on some previously contracted debt.
3d, Whether it was necessary in the said counts to set forth the
means by which the defendant, as president of said bank, possessed
himself of the moneys of the bank, which he employed in purchasing
said stock.
4th, Whether it was necessary to charge in the said counts that
the defendant, as president of the bank, was in possession of funds
of the bank, in addition to charging misapplication of said
funds.
5th, Whether the counts of said indictment charging the
fraudulent purchase by the defendant, as president of said banking
association, of certain shares of stock
"in trust, for the use of said association, and which said
shares of stock were not purchased as aforesaid in order to prevent
loss upon any debts theretofore contracted with said association in
good faith,"
alleged with sufficient certainty an offense under said sec.
5209 of the Revised Statutes of the United States.
6th, Whether count numbered 116 of the said indictment charges
with sufficient certainty an offense under said § 5209 of the
Revised Statutes of the United States.
7th, Whether it is necessary in an indictment under § 5209 of
the Revised Statutes, charging willful misapplication of the funds
of a banking association, to allege that such misapplication was
with intent to defraud.
8th, Whether the purchase of stock in violation of § 5201 of the
Revised Statutes of the United States, if made with intent to
defraud, and by one or more of the officers of the bank named in
said sec. 5209 of the Revised Statutes, is a crime punishable under
the latter section.
9th, Whether those counts which cover alleged false entries
sufficiently state an offense under sec. 5209.
These questions, together with the pleadings upon which they
arose, were, on motion of counsel for the United States, certified
by the judges of the circuit court to this Court for its opinion
thereon.
Page 107 U. S. 661
MR. JUSTICE WOODS delivered the opinion of the Court.
In passing upon the questions certified to us by the circuit
court, it will be convenient to follow the order in which they have
been argued by counsel, rather than that in which the questions are
presented by the certificate of division.
The section of the Revised Statutes upon which the indictment is
based creates and describes certain offenses and expressly
denominates them misdemeanors. In the case of
United
States v. Mills, 7 Pet. 138,
32 U. S. 142,
it was said by this Court that
"The general rule is that in indictments for misdemeanors
created by statute, it is sufficient to charge the offense in the
words of the statute. There is not that technical nicety required
as to form which seems to have been adopted and sanctioned by long
practice in cases of felony and with respect to some crimes where
particular words must be used, and no other words, however
synonymous they may seem, can be substituted. But in all cases, the
offense must be set forth with clearness, and all necessary
certainty to apprise the accused of the crime with which he stands
charged."
In the case of
United States v. Simmons, 96 U. S.
360,
96 U. S. 362,
it was said by this Court, speaking by MR. JUSTICE HARLAN, that
"When an offense is plainly statutory, it is, 'as a general
rule, sufficient in the indictment to charge the defendant with
acts coming within the statutory description in the substantial
words of the statute, without any further expansion of the matter'
. . . but to this rule there is the qualification, fundamental in
the law of criminal procedure, that the accused must be apprised in
the indictment with reasonable certainty of the nature of the
accusation against him, to the end that he may prepare his defense
and plead the judgment as a bar to any subsequent prosecution
against him."
So in the case of
United States v. Carll, 105 U.
S. 611,
105 U. S. 612,
it was said by MR. JUSTICE GRAY, speaking for the Court, that
"In an indictment upon a statute, it is not sufficient to set
forth the offense in the words of the statute unless those words of
themselves fully, directly, and expressly, without any uncertainty
or ambiguity, set forth all the elements necessary to constitute
the offense intended to be punished, and the fact that the statute
in question, read in the light of the common law and of other
Page 107 U. S. 662
statutes in the like matter, enables the court to infer the
intent of the legislature does not dispense with the necessity of
alleging in the indictment all the facts necessary to bring the
case within that intent."
In the case of
United States v. Pond, 2 Curt.C.C. 265,
the rule was thus stated by Mr. Justice Curtis:
"It must be remembered that this is an indictment for a
misdemeanor created by the statute, and that in general it is
sufficient to describe such an offense in the words of the statute
. . . unless they embrace cases which it was not the intention of
the legislature to include within the law. If they do, the
indictment should show that this is not one of the cases thus
excluded."
Applying the rules thus laid down to the counts of the
indictment, we are to consider whether they sufficiently state an
offense under sec. 5209 of the Revised Statutes.
To describe the offense charged in the first 36 counts of the
indictment, sec. 5209 requires the following averments:
1. That the accused was the president or other officer of a
national banking association, which was carrying on a banking
business.
2. That being such president or other officer, he made in a
book, report, or statement of the association, describing it, a
false entry, describing it.
3. That such false entry was made with intent to injure or
defraud the association or to deceive any agent, describing him,
appointed to examine the affairs of the association.
4. Averments of time and place.
An examination of the counts under consideration shows that they
contain all these averments pleaded with clearness and reasonable
certainty. They must therefore be held sufficient unless some of
the objections made to them by counsel for defendant are well
taken.
It is urged that these counts are defective because they do not
contain an averment that the false entry was made "in an account
of, and in the due course of, business of the bank." Neither of
these averments is required by the statute. It is alleged that the
false entry was made in a book belonging to and in use by the
association in transacting its banking business, and known and
designated as "profit and, loss, number
Page 107 U. S. 663
six." To hold this insufficient would carry refinement in
criminal pleading to an impracticable extent. The counts point out
to the defendant and the court, with certainty and precision, the
book used by the association in which the false entry was made, and
this is all that is necessary under the statute.
It is next objected that the false entries as set out in the
counts do not of themselves have any significance, and are
unintelligible without explanation. This is mere assumption.
Conceding that the entries may be unintelligible to persons not
skilled as accountants, it does not follow that they are so to the
agent appointed by the Comptroller, who, it is alleged, was the
person whom the entries were intended to deceive. But if the
entries needed explanation, it was perfectly competent for the
pleader to explain them by innuendo.
Rex v. Gripe, 1
Ld.Raym. 256;
Rex v. Aylett, 1 T.R. 63;
Rex v.
Taylor, 1 Camp. 404;
Reg. v. Virrier, 12 Ad. &
El. 317;
Mix v. Woodward, 12 Conn. 262;
Van Vechten v.
Hopkins, 5 Johns. 211. This he has done by averring what the
entries purported to show and did in substance indicate and
declare. Having explained the entries, he avers them to be false.
To hold this insufficient would be to decide that the making of
false entries in the books of a banking association, in the usual
method of bookkeeping, and which were intelligible to all
accountants, could not be punished under the statute because not
intelligible to persons generally or to persons not skilled in
bookkeeping.
It is next objected that the counts under consideration are
argumentative and repugnant because they do not allege that
interest was due to the association from the individuals named in
the alleged false entries. This objection is not well founded.
Whether interest was due or not is quite immaterial. The charge is
that a false entry was made on the books of the association which
purported that a certain sum was, on a day named, received from a
person named on account of interest then and there due from him to
the association; that the said sum was not then and there received
on account of interest due and was not received on any account from
any sources whatever. The falsity of the entry
Page 107 U. S. 664
does not consist in the fact that there was no interest due from
the person named, but in the fact that money which the entries
declared had been received from him on account of interest due had
not been received from him on that or any other account. It was
therefore entirely unnecessary to aver that no such interest was
due, and the want of such averment does not render the counts
argumentative or repugnant.
It is further objected to these counts that a false entry to the
credit of profit and loss alone could not deceive a bank examiner,
and therefore that the counts are repugnant. This is also mere
assumption. But if the false entry is calculated to deceive, the
making of it in the books of the association, with intent to
deceive, is all that is necessary to bring the act within the
meaning of the statute. It is perfectly apparent that any false
entry in any account book of a bank used in transacting its banking
business is calculated to deceive. The fact that its falsity may be
exposed by an examination of other books of account does not render
it any the less a false entry made with intent to deceive. The
circumstance that the attempt to deceive by making a false entry
was not an adroit and skillful one does not relieve the act of its
criminal character.
It is further contended that the counts under consideration are
insufficient because it is not alleged that at the time the false
entries were made, an agent had been appointed to examine the
affairs of the association. This objection is based on the theory
that the statute was designed to punish only those officers of a
banking association who made false entries in its books with intent
to deceive examiners appointed before the false entries were made.
We do not think the statute will bear this construction.
The appointment of agents to examine the affairs of national
banking associations is provided for by sec. 5240 of the Revised
Statutes, which declares:
"The Comptroller of the Currency, with the approval of the
Secretary of the Treasury, shall, as often as shall be deemed
necessary or proper, appoint a suitable person or persons to make
an examination of the affairs of every banking association, who
shall have power to make a thorough examination into all the
affairs of the association. "
Page 107 U. S. 665
It appears from this section that the appointment of these
agents is not permanent, but occasional and temporary, and that the
appointments are made as often as shall be deemed necessary and
proper. It is therefore apparent that the statute which punishes
false entries made with intent to deceive such agents refers to any
entries made with that intent, whether before or after the
appointment of the agent.
There is nothing impossible in the averment that false entries
have been made with intent to deceive an agent to be appointed
after they are made. The agents are often purposely appointed
without notice to the association. The fact that the Comptroller of
the Currency has information that the officers of an association
are making false entries in its books may be the occasion for
appointing an agent to examine its affairs. To hold that the
officers of the association would only be punishable for false
entries made after an agent had been appointed would rob the law of
a large part of its salutary effect. Its purpose is clear to punish
all false entries in the books of the bank, no matter when made, if
made with intent to defraud the association or deceive the
examiner. We think that, in respect to the point under
consideration, the indictment is sufficient.
We are of opinion that none of the objections raised to the
first 35 counts is well taken. They are refined and unsubstantial,
and not sustained by the rules of criminal pleading in cases of
misdemeanor or by the fair construction of the statute on which the
indictment is based. These counts embody the language of the
statute; they charge every element of the offense created by the
statute with sufficient certainty, and give the defendant clear
notice of the charge he is called on to defend. They are therefore
sufficient.
United States v.
Cook, 17 Wall. 168, and cases already cited.
The thirty-sixth count differs from the first thirty-five in
charging the intent with which the offense was committed. The
intent is charged to be "to injure and defraud the said
association, and certain persons to the grand jurors unknown." This
follows the language of the statute.
Clearly it is possible to injure and defraud the association or
its stockholders or other persons by false entries in its
account
Page 107 U. S. 666
of profit and loss. The charge is not repugnant or impossible.
We are of opinion, therefore, that the first thirty-six counts of
the indictment, being those which charge false entries in the books
of the association, sufficiently state an offense under sec. 5209.
It follows that count 117, which is in all respects similar to
count 1, and count 118, which is in all respects similar to count
36, are good and sufficient.
We shall next consider count numbered 77 and the similar counts.
That portion of the section on which they are based makes it an
offense for the president or other officer of a banking association
to embezzle, abstract, or willfully misapply the moneys of the
association with intent to injure or defraud the association, or
any company or person.
The seventy-seventh count of the indictment charged that the
defendant being president of the association, paid to a certain
person unknown the sum of $2,400 of the moneys of the association
in the purchase of forty shares of its capital stock, which stock,
so purchased, was held by the defendant in trust for the use of the
association, and the same was not purchased to prevent loss on any
debt theretofore contracted with the association in good faith, and
that so the defendant did willfully misapply the moneys of the
association with intent to injure and defraud the association and
certain persons to the grand jurors unknown.
The question is propounded to us whether this count sufficiently
describes an offense under sec. 5209 of the Revised Statutes.
The purchase of its own stock by the association, except to
secure a debt due it, is forbidden by law. Is a purchase for the
use of a banking association of its own stock by its president,
when not necessary to secure a debt due the association, a willful
misapplication of its funds, punishable by sec. 5209? We think the
willful misapplication made an offense by this statute means a
misapplication for the use, benefit, or gain of the party charged,
or of some company or person other than the association. Therefore,
to constitute the offense of willful misapplication, there must be
a conversion to his own use or the use of someone else of the
moneys and funds of the association
Page 107 U. S. 667
by the party charged. This essential element of the offense is
not averred in the counts under consideration, but is negatived by
the averment that the shares purchased by the defendant was held by
him in trust for the use of the association, and there is no
averment of a conversion by the defendant to his own use or the use
of any other person of the funds used in the purchase of the
shares. The counts therefore charge maladministration of the
affairs of the bank, rather than criminal misapplication of its
funds.
If we hold these counts to be good, then every official act of
any officer, clerk, or agent of a banking association, by which its
funds are applied in a way not authorized by law would be
punishable under sec. 5209.
For instance, sec. 5200 of the Revised Statutes declares
that
"The total liabilities to any association of any person, . . .
for money borrowed, . . . shall at no time exceed one-tenth part of
the capital stock of the association actually paid in."
Sect. 5201 provides that no association shall make any loan or
discount on the security of the shares of its own capital stock
unless such security shall be necessary to prevent loss on a
previously contracted debt. If the counts under consideration are
sustained, then every president, director, cashier, teller, clerk,
or agent of a banking association who has any part in lending the
money of the association contrary to the provisions of these
sections, is guilty of a criminal misapplication of its funds. So,
by sec. 5137 of the Revised Statutes, the purposes for which a
banking association may purchase and hold real estate are limited,
and specifically pointed out. If the directors of a banking
association should authorize the purchase of a piece of real estate
for its use, but not for purposes authorized by the statute, even
though with intent to injure some corporate body or natural person,
it could hardly be claimed that the directors who made the order,
and the other officers or agents of the association who, with a
like intent, had any hand in making the purchase or in paying out
the money of the bank therefor, would be liable to indictment and
imprisonment under sec. 5209.
The act charged by the counts under consideration are precisely
of the same character as those just mentioned. They
Page 107 U. S. 668
are acts of maladministration of the affairs of the association
by its officers. The penalty for such acts is prescribed by sec.
5239, which declares:
"If the directors of any national banking association shall
knowingly violate, or knowingly permit any of the officers, agents,
or servants of the association to violate, any of the provisions of
this title (National Banks), all the rights, privileges, and
franchises of the association shall be hereby forfeited. . . . And
in case of such violation, every director who participated in or
assented to the same shall be held liable in his personal and
individual capacity for all damages which the association, its
shareholders, or any other person shall have sustained in
consequence of such violation."
We are therefore of opinion that the willful misapplication of
the moneys and funds of the banking association which is made an
offense by sec. 5209 means something different from the acts of
official maladministration referred to in sec. 5239, and it must be
a willful misapplication for the use or benefit of the party
charged, or of some person or company other than the association,
with intent to injure and defraud the association or some other
body corporate or some natural person.
As the counts under consideration, namely, count 77, and the
similar counts down to and including count 96, do not show that the
willful misapplication therein alleged was made by the defendant
for his own use, benefit, or advantage, but for the use of the
association, we are of opinion that they do not allege an offense
under sec. 5209, and are therefore insufficient and bad. The counts
are, in our opinion, bad also for repugnancy. They aver that the
defendant purchased the shares of the association and held them in
trust for the association. This charge, without further averments,
is clearly repugnant. It is true that it is possible for an officer
of a banking association, with intent to defraud it, to
misappropriate its funds in the purchase for its use of its own
stock. But the count which avers such an act should also make other
averments to show that the application was not merely a use of the
money for the benefit of the association forbidden by law, but a
criminal misapplication by which it was possible that the
association could be defrauded.
Page 107 U. S. 669
For the reasons assigned, the counts next following, numbered
from 97 to 116, inclusive, which are similar to count 77 except
that they severally fail to aver that the act therein charged was
done with intent to injure and defraud, must be held to be
insufficient. The counts last mentioned, as well as the counts
numbered from 56 to 76, inclusive, are bad for the further reason
that they fail to aver any intent to injure and defraud mentioned
in § 5209. The intent to injure and defraud is an essential
ingredient to every offense specified in the section, and the
failure to aver the intent is a fatal defect in the counts in which
it occurs.
We shall next consider court numbered 37 and the counts which
are similar to it. These counts simply charge that the defendant,
being president of the association, willfully misapplied its moneys
and funds by buying therewith certain shares of its stock, with
intent to injure and defraud the association and certain persons to
the grand jurors unknown.
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. These averments the
pleader has in these counts attempted to make by charging that the
defendant paid out the funds of the association in the purchase of
its own stock. But this is not necessarily an unlawful use of the
funds of the association. It is not every purchase of its own
shares by an association that is forbidden. The very section (5201)
and sentence of the statute which declares that no banking
association shall be a purchaser of its own shares contains the
exception "unless such purchase shall be necessary
Page 107 U. S. 670
to prevent loss upon a debt previously contracted in good
faith." This exception should have been negatived in these counts.
The rule of pleading as laid down by Mr. Chitty is that
"When a statute contains provisos and exceptions in distinct
clauses, it is not necessary to state in the indictment that the
defendant does not come within the exceptions or to negative the
provisos it contains. On the contrary, if the exceptions themselves
are stated in the enacting clause it will be necessary to negative
them in order that the description of the crime may in all respects
correspond with the statute."
1 Chitty, Crim.Law 283-284.
Thus, where a statute declared that if one on the Sabbath day
"shall exercise any secular labor, business, or employment, except
such only as works of necessity and charity, he shall be punished,"
etc., a negative of the exception was held indispensable.
State
v. Barker, 18 Vt. 195.
See also Commonwealth v.
Maxwell, 2 Pick. 139; 1 East 167;
Spieres v. Parker,
1 T.R. 141;
Gill v. Scrivens, 7 T.R. 27; 1 Bishop's
Crim.Pro. sec. 636.
The failure of the counts under consideration to aver that the
purchase of the shares of the association was not necessary to
prevent loss upon a debt previously contracted in good faith is a
fatal defect. These counts merely charge that the defendant
willfully misapplied the funds of the association, and then aver a
use of the funds, which, from all that appears to the contrary, was
a perfectly lawful application of them. The result is that no
offense is described in the counts numbered from 37 to 56,
inclusive, and that they are therefore insufficient and bad. It
also follows that counts numbered from 57 to 76, inclusive, which
are similar to the series just mentioned, except that they contain
no charge of intent to injure and defraud, are also bad.
What we have said disposes of all the questions propounded to us
which it is necessary that we should answer. We answer the first,
second, seventh, and ninth questions in the affirmative, and the
fifth, sixth, and eighth questions in the negative. From these
answers it appears that all the counts from the thirty-seventh to
the one hundred and eighteenth, inclusive, are
Page 107 U. S. 671
insufficient and bad. We therefore decline to answer the third
and fourth questions, which relate to the same counts.
United States v.
Buzzo, 18 Wall. 125.
