State v. Shove

The following opinion was filed February 23, 1897: Cassoday, C. J. The defendant was, at the time in question, the president, manager, director, and stockholder of the “T. C. Shove Banking Company.” As such, he was convicted of having received on deposit April 11,1892, the $300 mentioned, contrary to sec. 4541, B. S. Eliminating from — 6 — •that section what is not applicable here, and it declares, in effect, that “ any officer, director, stockholder, . . . manager, ... or agent of any bank, . . . who shall accept or receive on deposit, or for safe-keepvng, or to loan, -from any person, any money, or any bills, notes, or other paper circulating as money, or any notes, drafts, bills of exchange, bank checks or other commercial paper for safekeeping or for collection, when he 7mows, or has good reason to know, that such bank ... is unsafe or insolvent, shall be punished by imprisonment,” etc. The constitutionality of this statute has been repeatedly sustained by this court, and its validity is not now challenged. Baker v. State, 54 Wis. 368; In re Koetting, 90 Wis. 166. 1. The principal contention of counsel for the defendant is to the effect that the certificate reciting that Hattie J. GUe had “ deposited ” in the bank $300, payable one year from the date thereof, and then with interest, and not subject to check, made the transaction a loan, and not a deposit, and hence not within the condemnation of the statute. The argument is that the bank simply borrowed the money and gave its promissory note therefor, due in one year from date, and therefore did not accept or receive the money on deposit, nor for safe-keeping, nor to loan, nor for collection, within the meaning of the statute. We assume that the bank had authority, as incident to its necessary powers to carry on such business, to issue such time certificates. S. & B. Ann. Stats, sec. 2024, subsec. 21; Rockwell v. Elkhorn Bank, 13 Wis. 653; Ballston Spa Bank v. Marine Bank, 16 Wis. 120; Curtis v. Leavitt, 15 N. Y. 9, 295, subd. 5. In construing the statute in question, this court has, among other things, said: “The manifest object of the statute in question was to suppress the business of banking or brokerage by any insolvent person, company, or corporation. It therefore inflicts punishment upon persons so engaged, knowing the fact. ... A bank implies capi — 7 — tal, and capital invites confidence. A man holding himself out as a banker or broker thereby gives public proclamation that he has money, and property readily converted into money, in his possession and subject to.his control, and for that reason he may be safely trusted. . . . For an insolvent banker, company, or corporation to continue the business of banking is to hold out assurances of responsibility and surplus capital where neither exists. To do so knowingly is to secure the confidence, and hence obtain the money, of the ignorant and unwary by an implied deception. It is the old story of securing the victim by a display of false colors. To suppress this mischief, to save the public from being induced to deposit money wfith such insolvent by the implied assurance of responsibility and wealth essential to the business, when they do not in fact exist, was the evident purpose of this statute.” Baker v. State, 54 Wis. 376, 377. These views have been expressly sanctioned in Meadowcroft v. People, 163 Ill. 56. Judge Jenkins has expressed similar views in In re Cook, 49 Fed. Rep. 842; S. C. Cook v. Hart, 146 U. S. 183. As said by Mr. Justice WiNsnow in a recent case: “ The offense consists in receiving deposits in a bank in fact insolvent, and which the person receiving the deposit knew, or had good reason to know, was insolvent.” In re Koetting, 90 Wis. 171. Money deposited in a bank is, in law, a loan by the customer to the bank. Sims v. Bond, 2 Nev. & M. 608; S. C. 5 Barn. & Adol. 389. “All deposits made with bankers may be divided in two classes, namely, those in which the bank becomes bailee of the depositor, the title to the thing deposited remaining with the latter, and that other kind of deposit of money peculiar to banking business, in which the depositor, for his own convenience, parts with the title to his money, and loans it to the banker; and the latter, in consideration of the loan of the money and the right to use-it for his own profit, agrees to refund the same amount, or any — 8 — part thereof, on demand.” Marine Bank v. Fulton Bank, 2 Wall. 256. See, also, Planters' Bank v. Union Bank, 16 Wall. 483; Oulton v. Savings Inst. 17 Wall. 109; Commercial Bank v. Armstrong, 148 U. S. 59. Ordinarily, the money so accepted or received by such bank or banker is accepted' or received on deposit. In order to make the section broad enough to cover every case where money is so accepted or received by a person so engaged in the business of banking-when he knows, or has good reason to know, that such bank, or banker is unsafe or insolvent, there were added to the words “on deposit” the words “or for safe-keeping, or to loan,” together with the other words mentioned, including, the words “ or for collection,” as stated. The pui’pose of the section, therefore, seems to be to punish every person engaged in the business of banking who, knowing, or having, good reason to know, that such bank or banker is unsafe or insolvent, nevertheless accepts or receives money in suchi business, either “ on deposit, or for safe-keeping, or to loan,” or accepts or receives such paper “for collection.” These four purposes accompanying such acceptance or receipt of money or commercial paper for collection would seem to be-sufficiently broad and general to include every purpose for-which the bank or banker could accept or receive money or commercial paper for collection. If making the certificate of deposit payable in one year takes the case out of the statute, then making such certificate payable in a month or a week or a single day would also take a case out of the statute. As short-time certificates are, ordinarily, as acceptable to customers as certificates payable on demand, it is-obvious that an insolvent banker or officer of an insolvent bank, with full knowledge of such insolvency, might, by issuing such time certificates, continue such business indefinitely, without committing the offense prescribed in the-statute, unless it is construed so as to cover deposits upon which such time certificates are issued, as well as those pay — 9 — able on demand. “"Where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftsman’s unskilfulness or ignorance of the law, except in the case of necessity or the absolute intractability of the language used.” Salmon v. Duncombe, 11 App. Cas. 627. “ In construing statutes, the usual and proper mode is to ascertain the intention of the legislature from the language they have used, connected with the state of the law on the same subject anterior to the passage of the statute. When the courts know for what particular mischief the legislature intended to provide a remedy, it is their duty so to construe the statute as most effectually to suppress the mischief and advanqe the remedy.” Coster v. Lorillard, 14 Wend. 297. “ Even penal statutes are not to be construed so strictly as to defeat the obvious intention of the legislature.” U. S. v. Wiltberger, 5 Wheat. 76; Manitowoc Co. v. Truman, 91 Wis. 12. See, also, U. S. v. Freeman, 3 How. 564, 565; U. S. v. Saunders, 22 Wall. 492. While a certificate of deposit payable at a fixed time in the future may technically be regarded as a loan and not a mere deposit, yet, in view of the obvious purpose of this statute, we are constrained to hold that the transaction in question was a deposit within the meaning of the statute. 2. The mere fact that a portion of the $300 consisted of a certificate of deposit held against the same bank, and the accrued interest thereon, which was surrendered at the time, did not make the transaction essentially different from what it would have been had the whole amount of $300 been deposited in cash, as recited in the certificate. The cash was present, or supposed to be present, in the bank, and was considered and treated the same as though the cashier had actually passed it over to Glye and she had immediately redeposited the same in the bank. 3. We perceive no error in the method of proving the insolvency of the bank at the time of receiving the money and — 10 — issuing the certificate of deposit iu question; and that is so whether by such insolvency is meant inability to pay its debts in the ordinary course of business, or merely inability to pay in full at some future time, upon ultimately winding up its affairs. The evidence was certainly material, and relevant and pertinent to the issue on trial, and hence competent. By the Court.— The several exceptions certified to this ■court pursuant to sec. 4720, R. S., are each and all overruled. A motion for a rehearing was denied April 30, 1897. The authorities as to criminal liability for receiving a deposit into a 'bank when insolvent are reviewed in a note to Comm. v. Jurikin (170 Pa. St. 194), in 31 L. R. A. 124. Later cases on the same question are Meadoiocroft v. People, 163 Ill. 56, 35 L. R. A. 176; and State v. Beach -(Ind.), 36 L. R. A. 179. — Rep.