Spurr v. United States, 174 U.S. 728 (1899)

Spurr v. United States

No. 448

Argued March 13-14, 1899
Decided May 22, 1899
174 U.S. 728

CERTIORARI TO THE CIRCUIT COURT

OF APPEALS FOR THE SIXTH CIRCUIT

Syllabus

Spurr was tried in the Circuit Court of the United States for the Middle District of Tennessee on three indictments, consolidated together, each of which charged him with having willfully violated the provisions of Rev.Stat. § 5208 by willfully, unlawfully and knowingly certifying certain cheques drawn on said bank by Dobbins and Dazey, well knowing that Dobbins and Dazey did not have on deposit with the bank at the times when the cheques were certified, respectively, an amount of money equal to the respective amounts specified therein. It was not denied that the defendant certified the cheques, and that the account of Dobbins and Dazey was overdrawn when the certifications took place. The questions for determination were defendant’s knowledge of the state of Dobbins and Dazey’s account when the cheques were certified and his intent in the certifications. After the case had been committed to the jury, and they had had it under consideration for some hours, they returned to the courtroom and asked the following question, which was written out: "We want the law as to the certification of cheques, when no money appeared to the credit of the drawer." The court read to the jury the first half of Rev.Stat. § 5208, as follows:

It shall be unlawful for any officer, clerk or agent of any national banking association to certify any cheque drawn upon the association unless the person or company drawing the cheque has on deposit with the association at the time such cheque is certified, an amount of money equal to the amount specified in such cheque.

The court then inquired: "Does this answer your question?" To which the foreman replied: "Yes, sir." The court again read that part of the section, and made certain observations; among others that a false certification was "the certifying by an officer of the bank that a cheque is good when there are no funds to meet it." As the jury were retiring, counsel for defendant said to the court that he thought what the jury wanted was the act of 1882 which the court had read to them, and that the court ought to read and explain that act to the jury. That act provided that an officer, clerk or agent of a national bank willfully violating the provisions of Rev.Stat. § 5208, etc., "should be deemed guilty of a misdemeanor, and should, on conviction, . . . be fined," etc. The court, after asking if the counsel referred to the act prescribing a penalty for false certification, and receiving an answer in the affirmative, said that the jury had nothing to do with that. Held that the circuit court clearly erred in declining the request of counsel in respect of the act of 1882.

Spurr was tried in the Circuit Court of the United States for the Middle District of Tennessee on three indictments, each containing several counts, for the violation of section 5208 of the Revised Statutes, which provides:

It shall be unlawful for any officer, clerk, or agent or any national banking association to certify any check drawn upon the association unless the person or company drawing the check has on deposit with the association at the time such check is certified, an amount of money equal to the amount specified in such check. Any check so certified by duly authorized officers shall be a good and valid obligated against the association, but the act of any officer, clerk, or agent of any association in violation of this section shall subject such bank to the liabilities and proceedings on the part of the Comptroller as provided for in section fifty-two hundred and thirty-four.

By section 13 of the Act of congress approved July 12, 1882, 22 Stat. 162, c. 290, it is provided:

That any officer, clerk, or agent of any national banking association who shall willfully violate the provisions of an act entitled "An act in reference to certifying checks by national banks," approved March third, eighteen hundred and sixty-nine, being section fifty-two hundred and eight of the Revised Statutes of the United States, or who shall resort to any device, or receive any fictitious obligation, direct or collateral, in order to evade the provisions thereof, or who shall certify checks before the amount thereof shall have been regularly entered to the credit of the dealer upon the books of the banking association, shall be deemed guilty of a misdemeanor, and shall, on conviction thereof in any circuit or district court of the United States, be fined not more than five thousand dollars, or shall be imprisoned not more than five years, or both, in the discretion of the court.

The indictments charged that Spurr, being the president of the Commercial National Bank of Nashville, Tenn. willfully violated the provisions of section 5208 of the Revised Statutes by willfully, unlawfully, and knowingly certifying certain checks drawn on said bank by Dobbins & Dazey, well knowing that Dobbins & Dazey did not have on deposit with the bank at the times when the checks were certified, respectively, an amount of money equal to the respective amounts specified therein. They were consolidated and tried together, and a verdict of guilty returned as follows:

Came the United States attorney, and also the defendant in proper person, and came also the jury heretofore impaneled, and upon their oaths do say that they find the defendant guilty as charged in the indictment, and recommend him to the mercy of the court.

Motions for new trial and in arrest of judgment were made and overruled, and judgment entered on the verdict in these words:

And thereupon the United States, by its district attorney, moved the court for sentence upon the verdict of the jury heretofore rendered, upon count No. 2 of indictment No. 7,994, count No. 2 of indictment No. 8,139, counts Nos. 1 and 4 of indictment No. 7,994, count No. 3 of indictment No. 8,139, count No. 2 of indictment 8,078, and count No. 5 of indictment No. 8,139. The defendant was thereupon called upon by the court to stand, and was asked by the court if he had anything further to say why the sentence of the law should not be pronounced against him, and he replied that he had nothing further to say than he had already said, and the court, being cognizant of the facts attending said verdict, and of the manner in which the issues found by said verdict were submitted to the jury, finds, and so orders and adjudges, that said verdict is applicable to indictment No. 7,994, counts 1 and 4, and indictment No. 8,139, count 3, all of which are based upon a check certified by the defendant dated January 3, 1893, and upon said verdict upon said counts of said indictments the court orders and adjudges that the defendant be confined in the penitentiary of the State of New York at Albany, New York, for two years and six months from this date.

The several counts of the consolidated indictments charged the certification by defendant of four checks drawn by Dobbins & Dazey between December 9, 1892, and February 13, 1893, both inclusive, on the Commercial National Bank, aggregating $95,641.95. The bank was organized in 1884, and defendant was its president and one Porterfield its cashier from its organization to its failure, March 25, 1893. Dobbins & Dazey were engaged in the purchase, sale, and exportation of cotton, and their financial standing and credit were excellent. When the four checks in question were certified by defendant, the account of Dobbins & Dazey was overdrawn, and the evidence was that their account was continuously and largely overdrawn during the period covered by these checks, except on one day, and that "this fact was known to Porterfield, the cashier, and all the employees of the bank under him in authority." But

there was also evidence tending to show that Porterfield misrepresented the real state of the Dobbins & Dazey account to the defendant and the committees and the directors of the bank by statements made to them, and also in his sworn reports to the Comptroller of the Currency, wherein the overdrafts in the bank were very largely understated.

There was also evidence on behalf of defendant to the effect

that he had no knowledge of the fact that the account of Dobbins & Dazey was overdrawn on the books of the bank at the time of the certification of any of the checks upon which he is indicted, nor at any time during the period covered by the dates of the checks;

that, when he certified these checks, he inquired in every instance, either of the cashier or of the exchange clerk, and in every instance received information that sufficient funds and credits of Dobbins & Dazey were then in the bank to cover the checks certified, and that he never at any time certified a check without receiving such information, and that he relied upon it as true; that, if the cashier was in, he inquired of him, and, if not, he inquired of the exchange clerk -- these being the appropriate sources of information. The evidence on this head is given in much detail in the bill of exceptions.

The bill of exceptions also stated:

After the jury were charged and had retired from the courtroom to consider their verdict, and had been deliberating for some hours, they returned to the courtroom and asked the following question, which was written out in pencil and handed to the court.

We want the law as to the certification of checks when no money appeared to the credit of the drawer.

The court then said:

The jury state that they want the law as to the certification of a check where there is no money to the credit of the drawer.

I cannot better answer this question which the jury has put to the court than by reading the section of the Revised Statutes which relates to that subject.

[Reads from section 5208, Rev.Stat.:]

It shall be unlawful for any officer, clerk, or agent of any national banking association to certify any check drawn upon the association unless the person or company drawing the check has on deposit with the association at the time such check is certified, an amount of money equal to the amount specified in such check.

Does this answer your question?

Foreman of the Jury: "Yes, sir."

The Court: "I read it again, so that you may all understand it." (The court read again that part of section 5208, Rev.Stat., quoted above, and added:)

Is that all, gentlemen? The $30,000 was the credit allowed, and these overdrafts, as the court understands from the testimony in the case, were in excess of that. The account of Dobbins & Dazey -- the overdrafts -- were in excess of the amount which Dobbins & Dazey had as a limit of line of credit.

I charge you, in addition to the instructions I gave you this morning, that a check drawn upon a bank where the drawer has no funds creates no obligation against the bank, and it does not create any obligation until it is certified as good by an officer of the bank, and that makes the check good as to the holder of it, and the bank then becomes estopped, although there was no warrant for the drawing of the check, as against the bona fide holder, so that the obligation of the bank to meet it in such case is made so by the act of the officer who certifies it to be good. That is what is meant by "false certification." It is the certifying by an officer of a bank that a check is good when there are no funds there to meet it.

You understand what I have said now is to be taken in connection with what I have before instructed you.

As the jury were retiring, counsel for defendant said to the court that he thought what the jury wanted was the act of 1882 making it a misdemeanor to willfully violate the section of the Revised Statutes which the court had read to them, and that the court ought to read and explain that act to the jury. The court asked if counsel referred to the act prescribing the penalty for false certification, and, on being answered in the affirmative, stated that the jury had nothing to do with that.

To this action of the court in reading twice section 5208 of the Revised Statutes, and in failing to read and explain the act of 1882, in response to the jury’s question, and to the additional instructions given to the jury at this time, beginning with the words "The $30,000," and ending with the words "to meet it," the defendant then and there excepted.

Sentence having been pronounced as before stated, the case was taken on error to the Circuit Court of Appeals for the Sixth circuit, and the judgment was affirmed, 87 F. 701, whereupon the cause was brought to this Court on certiorari.