State v. Jones

162 S.E. 466, 164 S.C. 415, 1932 S.C. LEXIS 26

Opinions

The opinion of the Court was delivered by

Mr. ChiEE Justice BeEase.

With one exception, a very important one, I am in accord with the legal conclusions expressed in the opinion of Mr. Justice Stabler. The exception is such as to compel the conclusion on my part that the conviction of the appellant should be reversed, and as to it alone I shall express my views.

The appellant was indicted, tried, and convicted for violating the provisions of Section 258 of the Criminal Code, in that he, as alleged in the indictment, “did knowingly, willfully and unlawfully borrow from the First Bank & Trust Company, a banking corporation organized and existing by and under the laws of the State of South Carolina, with its principal place of business in the City of Lancaster, County of Lancaster, and State of South Carolina, and the said Ira B. Jones, Jr., being then and there a director of the said First Bank & Trust Company, the sum of One Thousand One Hundred Seventy-one and 40/100 ($1,171.40) Dollars, without good security being given therefor, and without same having been approved in writing by two-thirds of the whole Board of Directors of the First Bank & Trust Company.”

The “borrowing” from the bank, alleged in the indictment, was by the way of overdrafts, the several amounts aggregating the total sum specified in the indictment. The offense alleged against the appellant was charged to have been done by him “knowingly, willfully and unlawfully.” I disagree with the proposed holding in the opinion of Mr. Justice Stabler that “there was sufficient evidence to go to the jury as to whether or not the borrowing was consciously and knowingly done” (italics mine), and, therefore, in violation of the statute.

A brief, and what I think is a fair, résumé of the evidence on the part of the state is as follows:

The first witness was Mr. W. C. Rion, a public accountant, employed by the County Commissioners of Lancaster County to make an audit of the insolvent bank after it had closed its doors. Through this witness, the state introduced records and books of the bank and showed from the ledger account of the appellant that at the time the bank closed he was overdrawn in his account to the amount of $1,171.40, the total being made up from several paid checks running from December 23, 1927, to July 24, 1929. The last day mentioned was that when the bank closed. The books and records of the bank, according to Mr. Rion, failed to show that the appellant had secured the written approval of the board of directors of the bank to his overdrafts. Mr. Rion. testified that the books of the Receiver (the appellant was Receiver) showed that the amount of the overdraft had been paid after the bank closed by the appellant through commissions received by him from the receivership.

Mr. Scarborough, who was connected with the state banking department, testified that he assisted in the audit of the bank; that he was familiar with the appellant’s signature, and identified his signature on two papers offered in evi dence, such papers being, as I gather from the record, reports of the bank to the state bank examiner.

Mr. C. W. Calhoun, also connected with the state banking department, testified that, in the course of an examination of the bank’s affairs made by him, he had a conversation with the appellant, the time of the conversation however, not being recalled, in which the appellant had told the witness that “he (the appellant) had worked in there (the bank) a good many years ago; and * * * he might have worked in there one or two days at odd times when some of the help was off.”

Neither of these three witnesses, Messrs. Rion, Scarborough, or Calhoun, knew anything of the transactions of the appellant with the bank before it closed, except from what was disclosed by the records.

Mrs. Mary C. Humphries, who was employed for some time as teller in the bank, on her examination in chief for the State, testified only as to the signature of the appellant, as a director, on a statement of the bank to the State Bank Examiner, made on March 27,_ 1929. Mrs-. Humphries did not testify at all concerning the overdrafts of the appellant.

On her cross-examination, Mrs. Humphries testified positively that the appellant, from 1922 until the closing of the bank, was not employed in the institution in any capacity, and did not work therein. She testified with equal positiveness that the appellant was employed, for several months prior to the closing of the bank, by the bank “as manager of the Lancaster News and the Insurance Agency,” and that “the bank was paying him for working” in those capacities.

No officer whatever of the bank with authority to make loans or to permit overdrafts testified in the case. There was no evidence from any one on the part of the State to show that the overdrafts charged on the bank’s books against the appellant’s account were true and correct. Also, there was no evidence on the part of the prosecution tending to show that the appellant was ever given any notice that his account was overdrawn, and absolutely no evidence to show that any demand for payment of any overdraft was ever made. There was-an absolute failure on the part of the State to show that the appellant at any time had any'knowledge of any overdraft being charged to his account.

The appellant was the only witness offered in his defense. His testimony was to the following effect: That he was never an employee in the First Bank & Trust Company, but that he was assistant cashier of the predecessor of that institution, the First National Bank; that he had not worked in either of the banks since 1922; that some years back, about 1922, he had owned some stock in the bank, which he had sold to his brother, Charles D. Jones, the president; that from that time until the bank closed he was not a stockholder; that his father, Ira B. Jones, Sr., at the time of his death in December, 1927, was the owner of fifty shares of the bank’s stock; that the appellant was appointed administrator of his father’s estate; that he had never attended a meeting of the stockholders or directors of the bank, had not qualified as a director, and had not been notified, except as herein stated, of his election as a director; that after his father’s death, and he had become administrator of the estate, he was asked by the cashier of the bank, as a representative of his father’s estate, to attest a report of the bank’s condition to the State Bank Examiner, which he did on the belief that he should do so as administrator of the estate; and that he learned later, after the bank closed, that some of his father’s stock had been transferred to him on the books of the bank, which information he did not have at the time he signed the statement to the State Bank Examiner. From December, 1927, to July, 1929, he was employed by the president of the bank to edit and manage the newspaper known as “The Lancaster News” and to manage the Lancaster Insurance Agency, both of which were owned by the Lancaster Security Company, the security company being owned by the bank; that the bank was his employer, and agreed to pay him salary at $200.00 per month for his services, the salary to be deposited to his credit monthly in the bank; that he received no other compensation for his services except the salary, and all moneys collected from the newspaper business and insurance agency were deposited in the bank. Appellant swore that he did not borrow, or intend to borrow, the moneys charged as overdrafts to him from the bank; that he had never been notified that his account was overdrawn, and no demand for payment of any overdraft was ever made on him; that he drew on his account to the amount of $1,-171.40, believing that his monthly salary payments had been placed to his credit according to the agreement made. After his election as receiver by the depositors of the bank, he ascertained that he was charged with an overdraft, and because of some adverse criticism and to keep his receivership from embarrassment, he decided to pay the overdraft appearing on the books, and to file claim for the amount so paid by him, as well as the balance due him on his salary account, in the receivership, and ask the approval of the Court for its payment; and at the time he made the payment it did not occur to him that he would be prosecuted on account of the overdraft, and if he had been so informed, he would not have paid the overdraft.

In no particular was the testimony of the appellant disputed. In one important respect, he was corroborated by the State’s witness Mrs. Humphries as to his employment by the bank to manage the newspaper and the insurance agency. While the record discloses that the president of the bank, with whom the appellant claimed to have made his agreement, had died before the trial, it appears that at least one other officer of the bank, the cashier, might have given evidence contradictory to that of the appellant, if the facts were not in accord with the appellant’s statement. It may have been possible also to have shown by other evidence the untruthfulness of the appellant’s testimony, if it was un true, but that at this time is not a matter for the attention of this Court.

1 recognize fully the rule, so repeatedly announced by this Court, that, in considering whether or not a criminal case should have been submitted to the jury, we are not to regard so much the evidence favorable to the defendant, but are required to see if there was any evidence so pointing to his guilt as to make the issue one for the jury.

With that rule in mind, I disregard the evidence favorable to the appellant — having recounted it only for the purpose of giving a fair statement as to both sides of the cause. Considering only the evidence upon which the State based its right to a conviction, I find it adduced evidence as to only the following things: (1) That the appellant at the time of the alleged overdrafts, or some of them, was a director of the bank, either de jure or de facto; and (2) that he overdrew his account in the bank as shown by the books of the institution.

Proof of those two things was necessary to bring about the appellant’s conviction. But another important element, or factor, in the crime alleged against the appellant was not established, namely, some proof by the State that the overdrafts were loans by the bank to the appellant, and that these loans, or at least one of them, were “consciously and knowingly” obtained. There was not a single bit of evidence to show that the appellant had any knowledge that he had “overdrawn his account,” or that he was conscious in any way of such fact.

If it is right to hold that the appellant was guilty of a violation of the criminal law, under the evidence adduced against him in this case, it would mean that any director of a bank could be convicted of the violation of the statute upon mere proof from the books of a bank that his account appeared thereon to be overdrawn. A holding to that extent would mean that one who happened to be a director of a bank could be convicted of violation of the terms of the statute if a bank clerk had honestly made a mistake in the director’s account. Such' a holding would place every bank director at the mercy of a dishonest bookkeeper. I cannot conceive that the statute, which, so far as I am advised, has not heretofore been construed by this Court, intended such direful consequences. The State before asking the conviction of a director of a bank, charged with the offense of borrowing money from his institution in a manner not allowed by the statute, should be required to show that the overdraft was not a mere error, but that the director not only borrowed in that manner, but intended to borrow, from the bank — that his purpose was to make himself debtor to the bank.

I do not find in the record a motion for the direction of a verdict on the ground that the State failed to show that the borrowing was consciously and knowingly done, and, for that reason, this Court should not order a directed verdict in appellant’s favor. There was a motion for a new trial on the ground mentioned, and, in my opinion, the same should have been granted. The State may be able, although that is a matter with which this Court is not now concerned, to supply the important evidence, which, in my opinion, it has so far failed to do. Accordingly, I am of the opinion that the judgment of conviction should be reversed, and the case remanded for a new trial.

A majority of the Court so agreeing, it is the judgment' of this Court that the judgment of the Court of general sessions of Lancaster County be, and the same is hereby, reversed, and the cause is remanded for a new trial.

Mr. Justice Carter concurs in result. Mr. Acting Associate Justice John I. Cosgrove concurs. Mr. Justice StabeEr dissents. Mr. Justice Cothran did not participate on account of illness.