The trial court quashed portions of each count of the indictment and sustained a demurrer to the remainder. This direct review is sought because of the contention that the rulings in question were based on a construction of Rev. Stat., § 5209.
Each of the six counts charged Corbett, one of the defendants, who was cashier of the Bank of Ladysmith, a national banking association, with making a false entry as to the condition of the bank in a report made to the Comptroller of the Currency. The charge was that the false entry was made with the intent to injure and defraud said association and to deceive an agent appointed to examine the affairs of such association, to wit, the Comptroller of the Currency of the United States. Newman and McGill, the other defendants, who were directors and respectively president and vice-president of the bank, were charged in each count with having with like intent aided, abetted, etc., Corbett in the making of the false entry. The motion to quash was directed against that portion of each count which charged that the alleged acts were done with intent to deceive an agent appointed to
It is insisted that there is no jurisdiction to review, because the decision below was not based upon the invalidity or construction of any statute. We think that, within the ruling in United States v. Keitel, 211 U.S. 370, the construction of Rev. Stat., § 5209 was involved. The suggestion of want of jurisdiction is, therefore, without merit.
In disposing of the merits we shall consider separately the rulings on the motion to quash and upon the demurrer.
1. The motion to quash.
The motion was sustained upon the theory that no offense was stated by the charge of making a false entry in the report to the Comptroller of the Currency with the intent to deceive an agent appointed to examine the affairs of the bank, viz., the Comptroller of the Currency, because that official was not such an agent. While this was the only question actually decided, nevertheless the reasoning which led the court to the conclusion by it applied went further and caused the court to declare that the statute in the particular mentioned was in effect inoperative. This because not alone was the intent to deceive the Comptroller of the Currency not embraced, but also the intent to deceive an agent appointed to examine was excluded so far as a report made to the Comptroller was concerned, as such agent would be required to examine the books and papers of the bank and not a report made to the Comptroller.
We are thus called upon to construe Rev. Stat., § 5209. The material portion of that section is as follows:
"Every president, director, cashier, teller, clerk, or agent of any association . . . who makes any false entry in any book, report, or statement of the association, with intent . . . to injure or defraud the association, . . . or to deceive . . . any agent appointed to examine the affairs of any such association, and every person who with like intent aids or abets any officer, clerk, or agent in any
Before analyzing its text we briefly refer to authorities relied upon on one side or the other as affirming or denying the correctness of the construction affixed to the section by the court below.
In United States v. Bartow, 10 Fed. Rep. 874, Benedict, District Judge, sustained a motion to quash certain counts of an indictment, which charged the making of a false entry in a report to the Comptroller of the Currency, with the intent to deceive that officer, and held in a brief opinion that the Comptroller was not an agent appointed to examine the affairs of a national banking association within the meaning of the statute.
In Cochran v. United States, 157 U.S. 286, which involved a review of convictions under indictments for making false entries in reports made to the Comptroller of the Currency, in violation of Rev. Stat., § 5209, passing on the objection that no one, except he who verified reports made to the Comptroller, could be convicted under the indictments, the court, among other things, said (p. 294):
"If the statements of Thomas be taken as true, he, although verifying the reports as cashier, could not be held criminally liable for their falsity, since he took and believed the statements of Cochran and Sayre as to the truth and correctness of such reports. If this be true, there was lacking on his part that intent to defraud the association, or to deceive the Comptroller of the Currency, which is made, by § 5209, a material element of the offense."
On page 298 the court considered a refusal to give an instruction, which, in the course of defining a false entry, said:
"The intention to deceive is essential to constitute a violation of the statute, and you must be satisfied beyond a reasonable doubt from the evidence, first, that the defendants or one of them made a false entry in said report; and, second, that it was made with the intention of misleading or deceiving
It was held that the refused instruction was substantially embodied in the charge as given, wherein, among other things, the trial court said (p. 298):
"The intent must have been, as laid in the indictment, to mislead and deceive one of these parties, either some of the officers of the bank or the officer of the Government appointed to examine into the affairs of the bank. . . . So that you must find, not only the fact that there was an omission to make the proper entry, but that with it was an intent to conceal the fact from somebody who was concerned in the bank, or concerned in overseeing it, and supervising its operations and the conduct of its business."
Since the decision of the Cochran case, and without citing that case on that subject, in Clement v. United States, 149 Fed. Rep. 305, the Circuit Court of Appeals for the Eighth Circuit, considering an objection that an allegation in a count was immaterial which charged that a false entry was made in a report to the Comptroller of the Currency, with intent to deceive that official and any agent who might be appointed to examine the affairs of a bank, said (p. 316):
"That is quite correct so far as the allegation concerning the intent to deceive the Comptroller is concerned. Such intent is not one of those requisite under § 5209 to constitute an offense. But the contention is not correct in so far as the allegation relates to the intent to deceive an agent who might be appointed to examine the affairs of the bank."
Irrespective of the direct conflict between the statement just quoted and the reasoning of the court below in the case at bar, it is apparent that neither the Bartow nor the Clement case, in view of the Cochran case, can be considered as persuasive. The Cochran case, however, it is urged should not be treated as authority, because it does not appear that any question was raised concerning the construction of the statute in the particular now controverted, but that the meaning
The report to the Comptroller, in which the entries were charged to have been false, and to have been made with the intent to deceive that officer as an agent appointed to examine, etc., was clearly one made under the provisions of Rev. Stat., § 5211, which reads as follows:
"Every association shall make to the Comptroller of the Currency not less than five reports during each year, according to the form which may be prescribed by him, verified by the oath or affirmation of the president or cashier of such association, and attested by the signature of at least three of the directors. Each such report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the association at the close of business of any past day by him specified; and shall be transmitted to the Comptroller within five days after the receipt of a request or requisition therefor from him."
The authority conferred by this section upon the Comptroller is but one among the comprehensive powers with which he is endowed by the statute for the purpose of examining and supervising the operations of national banks, preventing and detecting violations of law on their part, appointing receivers in case of necessity, etc. From the nature of these powers it would seem clear that the Comptroller is an officer or agent of the United States, expressly as well as impliedly clothed with authority to examine into the affairs of national banking associations, and therefore a false entry made in a report to him is directly embraced in the provision of Rev. Stat., § 5209. But it is argued while this may be abstractly true, it is not so when the provision of Rev. Stat., § 5240 is considered, conferring power upon the
"The object in construing penal, as well as other statutes, is to ascertain the legislative intent. . . . The words must not be narrowed to the exclusion of what the legislature intended to embrace; but that intention must be gathered from the words, and they must be such as to leave no room for a reasonable doubt upon the subject. . . . The rule of strict construction is not violated by permitting the words of the statute to have their full meaning, or the more extended of two meanings, as the wider popular instead of the more narrow technical one; but the words should be taken in such a sense, bent neither one way nor the other, as will best manifest the legislative intent."
Indeed, the aptness of the application of the principle just stated to the case in hand is well illustrated by the following considerations. If by distorting the rule of strict construction we were to construe the words of the statute, "any agent appointed to examine," so as to exclude the Comptroller of the Currency, the principal agent appointed for such purpose, by the same method we should be compelled to adopt the reasoning of the court below and to narrow the statute so as to exclude the intent to deceive by false entries in the report, an agent to whom the report was not to be made and who might not be called upon to examine the same, thus, in effect, as to intent to deceive any agent, destroying the statute. And this impossible conclusion at once serves to point out the correctness of the interpretation of the statute assumed in the Cochran case, that the intent to deceive, for which the statute provides, is an intent to deceive the official agents concerned in overseeing the bank and supervising its operation and the conduct of its business, including, of necessity, the Comptroller of the Currency and the subordinate agents or examiners whom the statute authorized him to appoint.
2. The demurrer.
Where intent is an essential ingredient of a crime it is settled that such intent may be charged in general terms and that the existence of the intent becomes, therefore, a question to be determined by the jury upon a consideration of all the facts and circumstances of the case. Evans v. United
"The indictment also charges that the entries were made with intent to injure and defraud the bank itself, but how this could be does not appear. It is barely possible that some harm might indirectly have come to the bank by the publication of the false report in the vicinity of the place where the bank was located, but this possibility is not sufficient to show the definite intent shown by the statute. The report must have been made with the purpose on the part of those signing it to injure and defraud the bank. The report could not possibly change the actual condition of the bank, and a false report showing a better condition than in fact existed might as readily be a benefit to the bank as a detriment. At all events, the detriment would be merely speculative, insufficient to afford proof of a positive intent to injure and defraud the bank."
But to these views we cannot give our assent. Because the false entries in the report showed the bank to be in a more favorable condition than it was in truth did not justify the conclusion that the entries in the report could under no circumstances have been made with the intent to injure the bank, unless it be true to say that it must follow, as a matter of law, that to falsely state in an official report a bank to be in a better condition than it really is, under every and all circumstances is to benefit and not to injure the bank. But