US SUPREME COURT DECISIONS

1. It is not an offense under § 5209 Rev.Stat., which forbids the willful misapplication of the moneys of a national banking association by a president of the bank, for such officer to procure the discount by the bank of

a note which is not well secured and of which both maker and endorser are, to the knowledge of the president, insolvent when the note is discounted, and to apply the proceeds of the discount to his own use.

2. Assuming that it was the duty of a president of a national banking association to prevent the withdrawal of deposits while the depositor is indebted to the association, he is nevertheless not liable for a criminal violation of § 5209 Rev.Stat., forbidding the willful misappropriation of the funds of the bank, solely by reason of permitting a depositor who was largely indebted to the bank to withdraw his deposits without first paying his indebtedness to the bank.

Indictment against the president of a national banking association. The indictment contained three counts. It was found by the same grand jury as the indictment in case No. 406, just decided, and was remitted and transferred to the circuit court in like manner.

The first count charged that the defendant, James H. Britton, on March 24, 1877, within the Eastern District of chanrobles.com-redchanrobles.com-red

Page 108 U. S. 194

Missouri, being the president and a director of the National Bank of the Missouri, the same being a national banking association organized under the act of Congress,

"did cause and procure to be then and there received and discounted by said association a certain promissory note, which said note was then and there in the words and figures following:"

"$20,835 ST. LOUIS, March 24, 1877"

" Four months after date, I promise to pay to the order of Geo. F. Britton, negotiable and payable at the National Bank of the Missouri, in St. Louis, twenty thousand eight hundred and thirty-five dollars, for value received, without defalcation or discount, with interest, after maturity at the rate of ten percent per annum."

"J. H. BRITTON"

That the note was endorsed as follows: "Geo. F. Britton;" that the defendant converted to his own use the proceeds of the discount of said note, to-wit, the sum of $20,251.63; that said note, when so discounted, was not well secured; that said

"James H. Britton, and the said payee and endorser of said note, to-wit, one George F. Britton, were then and there insolvent, as he, the said James H. Britton, as president and director as aforesaid, then and there well knew,"

and that said James H. Britton, by procuring said note to be discounted, and by applying the proceeds of said discount to his own use, willfully misapplied the said sum of $20,251.63 of the money and funds of said association, with intent then and there to defraud said association and certain persons to the grand jurors unknown.

The second count charged that on June 2, 1877, within the Eastern District of Missouri, one George F. Britton was indebted to said association in the sum of $79,480.23, as the maker of five promissory notes then unpaid; that said indebtedness of George F. Britton was known to James H. Britton, president and director of said association; that on said June 2, 1877, said notes were not well secured and said George F. Britton was insolvent, both of which facts said James H. Britton then well knew. Nevertheless, said James H. Britton, chanrobles.com-redchanrobles.com-red

Page 108 U. S. 195

as president and director of said association, did then and there receive and discount a note for $800, dated June 2, 1877, due and payable on August 5, 1877, signed by the said George F. Britton as maker, and endorsed by him, the said James H. Britton, he being then insolvent, as he then well knew; that said James H. Britton did then and there pay out of the moneys and funds of said association, as the proceeds of said discount, to the said George F. Britton, the sum of $780.45, contrary to the form of the statute, etc.

The third count charged that on May 18, 1877, within the Eastern District of Missouri, said James H. Britton was president and a director of said banking association; that from April 12, 1873, to May 18, 1877, one Alfred M. Britton had been continuously indebted to said association in the sum of $37,122.67, as maker of a certain promissory note during said period, owned and held by said association, and was then indebted to said association for interest past due on said note in the further sum of $4,529.01; that said Alfred M. Britton was on said May 18, 1877, insolvent; that on the day and year last named there was in the moneys and funds of said association to the credit of said Alfred M. Britton the sum of $36,860.45; that said James H. Britton, well knowing the said indebtedness of Alfred M. Britton to said association and his said insolvency, failed and neglected to cause to be applied to the said indebtedness of said Alfred M. Britton the said sum of $36,860.45, so as aforesaid in the moneys and funds of said association to the credit of said Alfred M. Britton, and did then and there willfully permit said Alfred M. Britton, while so indebted, to transfer and assign said sum of $36,860.45 to the credit of the City National Bank of Fort Worth, Texas.

"And so the said James H. Britton did willfully misapply the said sum of $36,860.45 of the moneys of said association, with intent to injure and defraud said association and certain persons to the grand jurors unknown, contrary,"

etc.

Upon demurrer to the indictment, the judges of the circuit court were divided in opinion upon the question whether the several counts charged with sufficient certainty an offense chanrobles.com-redchanrobles.com-red

Page 108 U. S. 196

under § 5209 of the Revised Statutes. The case comes to this Court upon this certificate of division.