Peightel v. United States

49 F.2d 235, 1931 U.S. App. LEXIS 3184
CourtCourt of Appeals for the Eighth Circuit
DecidedApril 16, 1931
DocketNo. 9014
StatusPublished
Cited by4 cases

This text of 49 F.2d 235 (Peightel v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peightel v. United States, 49 F.2d 235, 1931 U.S. App. LEXIS 3184 (8th Cir. 1931).

Opinion

VAN VALKENBURGH, Circuit Judge.

Appellants were president and cashier, respectively, of the New First National Bank of Springfield, Mo. Jointly with the vice president and four directors of the bank, they were indicted in the District Court for the Southern Division of the Western District of Missouri, charged with violating and conspiring to violate section 5209, Rev. St. U. S., as amended (12 USCA § 592). The indictment contained ten counts. The first nine counts charged substantive offenses of alleged willful misapplication of the moneys and funds of said banking association. The tenth count charged conspiracy to commit these substantive offenses. The misapplications charged were in substance the withdrawal of funds of the New First National Bank and the application thereof to the payment of interest and installments of principal upon a certain promissory note, dated February 8,1926, for the principal sum of $95,000, payable to George B. McDaniel and H. B. McDaniel, acting as trustees for the Springfield Clearing House Association, and signed by the defendants named in the indictment. The trial of the case resulted in the conviction of the president, vice president, and cashier, and the acquittal of the other directors. The vice president, Eslinger, was fined and the fine was paid. A sentence of three years in the penitentiary was assessed against President Peightel,’ and of eighteen months against Cashier Davis, appellants herein.

The contention of the government is that the $95,000 note was the obligation of the individual makers, and that funds of the bank were unlawfully applied upon the payment of their individual indebtedness. That of appellants is that this note was in fact primarily the obligation of the bank, the signers being merely accommodation makers or guarantors; that, for this reason, the funds of the bank were properly used in making the payments charged. Counsel for the government concedes that “if this were an obligation of the bank, then the whole case falls because the bank would certainly have a right to apply its assets on its own obligation.” This consideration, then, forms the basis of this appeal, all other questions being subsidiary thereto.

The execution of the note in question arose out of the following circumstances: The Bank of Greene County was a state bank doing business in Springfield, Mo., and, about February 1, 1926, the state commissioner of finance caused to be made an audit and examination of its affairs. This was conducted by one Charles L. Bollinger, deputy commissioner, residing in Springfield. He discovered that certain assets of the Bank of Greene County must be replaced by money or approved securities or the bank must be closed. Apparently the Bank of Greene County, through its officers, directors, and stockholders, was unable or unwilling to make the replacements demanded, and its failure, therefore, became imminent. On just what precise date this situation became known to the Springfield Clearing House Association, representing the banks of Springfield, is not made clear by the record, and is perhaps not of serious importance. There had been two recent and disastrous failures of Springfield banks, from the shock of which that community had not fully recovered, and there was great natural anxiety on the part of the Clearing House and others to avoid a recurrence of like nature.. Mr. Bollinger completed his examination on Saturday, February 6, 1926. The condition of the Bank of Greene County may have leaked out to the officers of the Clearing House a day or two before this, but certain it is that on the evening of February 6th a conference was held at Mr. Bollinger’s residence, at which Mr. French, the state commissioner of finance, the president, and some other members of the Clearing House Association, and various officers of the Bank of Greene County, were present. The problem was to discover some means by which the threatened bank failure could be averted. From some source came the suggestion that the assets of the Bank of [237]*237Greene County should he purchased and taken over by the New First National Bank. Mr. Peightel, the president of the latter bank, was called in. Bollinger says “he was there later in the night I believe. He wasn’t there at the original conference.” Of course terms acceptable to the New First National Bank had to be agreed upon — terms upon which .it could afford to take over the assets and liabilities of a failing bank without jeopardizing its own financial stability. The problem presented was not to rehabilitate the Bank of Greene County, which was going out of business, but rather to formulate terms safe and acceptable to the purchasing bank. Conferences to this end continued throughout the following day, Sunday, and until late into Sunday night. Among the assets of the Bank of Greene County were $115,000 in notes, described as “slow.” Mr. George B. McDaniel, president of the Clearing House Association, testified that he “figured” that $20,000 to be contributed by the Clearing House “would take care of any loss in handling the $115,-000.00 of paper.” Late Sunday night, or, rather, early Monday morning, final terms were agreed upon. The board of directors of the Bank of Greene County adopted a resolution empowering its officers to sell all its assets of every kind and character to the New First National Bank. A resolution of the latter bank authorized the purchase of all the assets of the Bank of Greene County, and the assumption of all its liabilities except those due to stockholders by reason of capital stock, undivided profits or surplus, or unpaid dividends. A contract pursuant to these resolutions was executed. The Clearing House Association agreed to contribute $20,000 and to make a loan of $95,000 to be evidenced by a note signed by the officers and directors of the purchasing bank, and secured by the aforesaid notes aggregating $115,000 as collateral thereto. In addition, property statements were required of and given by the makers. The $95,000 note was made payable to George D. McDaniel and H. B. McDaniel, leading Springfield bankers, as trustees for the Clearing House Association, in conformity with a trust agreement of even date. All the assets of the Bank of Greene County were delivered to the New First National Bank, including the $115,000 in notes, later deposited as collateral to the $95,000 note. Clearing House cheeks for $20,000 and $95,000 received the indorsement of the New First National Bank, and their proceeds were received and used by the New First National Bank in meeting the demands of its customers and those of the Bank of Greene County which it had absorbed. None of the proceeds of these checks were received by the makers of the $95,000 note. All the transactions above recited took place on Monday, February 8th, following- the conferences and agreements to which reference has been made.

The New First National Bank of Springfield, Mo., failed to open its doors for business March 17, 1928.' A receiver, appointed by the Comptroller of the Currency, took charge of the bank April 13, 1928. This indictment was returned March 5,1929.

The assignments of error specify:

1. The action of the court in overruling motions to quash. Conceding, without deciding, that a motion to quash can perform the office of a demurrer with respect to the matters therein stated, it is our opinion that the indictment is not vulnerable to attack by these motions, and that they were properly overruled.
2. The admission of evidence in the course of the trial as follows:
(a) The reports of the bank to the Comptroller of the Treasury which failed to show the $95,000 note as an obligation of the bank.

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Bluebook (online)
49 F.2d 235, 1931 U.S. App. LEXIS 3184, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peightel-v-united-states-ca8-1931.