UNITED STATES V. HARPER.
an indebtedness on the part of the bank for the amouut thus represented. He is chargeable with the full knowledge of that fact. If you believe these to be the facts, and if he did thus take to himself a credit on the books of the bank for $200,000, and on such credit drew out the funds of the association for his own use, then he was guilty of willfully and wrongfully abstracting the moneys of the bank. On the twenty-eighth of 1887, that transaction is repeated; without a dollar being deposited in the bank, and without any consideration given by himself, he has a second charge ticket made out, in his own handwriting and signed by himself, and under his direction another $200,000 is charged to the First National Bank of New York, and credited to himself; and he draws out of the bank this amount, as his account shows. Gentlemen, if you find that this second credit of $200,000 was taken or obtained in that way, the amount of that credit did not represent any indebtedness of the bank to the defendant; and whfln he drew the money from the bank, represented by that credit, he wrongfully withdrew it. No liability of the bank by a mere charge and credit ticket in his own favor, without consideration, could be thus created. The defendant could not in that way acquire any right to the funds of the bank. Again, on April 28, 1887, the defendant caused two certificates of deposit for $200,000 each to be issued to the Fi!1!lt National Bank of New York. These were dated the twenty-eighth of April, 1887. No money was deposited in the bank to cover these transactions; and the defendant states in his examination before you that he /l:ave his individual checks for the amounts of these two certificates of deposit. On the books oithe bank, which are in evidence before you, no BUch charge is made to his account, and no such checks appear to have been given by him. Now, look at that transaction a little further. On or about the time that these certificates were forwarded to New York, it is in proof before you that he drew or that there were drawn in favor of Wilshire, Eckert & Co., two drafts of the Fidelity National Bank for $100,000 each,-Nos. 2701 and 2703,-against that fund standing to its credit with the First National Bank of New York. These two drafts bear date of April 28 and April 30, 1887; are made payable to the order of J. W. Wilshire; and they are indorsed by him. One goes to Rosenfeld & Co. of Chicago, and the other goes to C. J. Kershaw & Co. of Chicago. They are in evidence before you with all their indorsements. Wilshire, Eckert & Co. give for these two drafts their own checks on the Fidelity National Bank of the same date, for $100,000. Now, these two checks are not entered on the books of the bank at the time, and do not appear until the eighteenth of June. 1887, when the bank was almost failing. If you should hereafter find, when the court comes to refer to that transaction, that these two drafts drawn on the First National Bank of New York in favor of J. W. Wilshire, and which by his indorsements passed to'Rosenfeld & Co. and C. J. Kershaw & Co., were for the use and benefit of the wheat transaction in which the defendant was interested, you will see in a moment (and the court may state the legal consequences) the result of that transaction would be such that the defendant would get to
his use $400,000 of the funds ·inthe bank here, in the two credits of February 12th and February 28th; and $200,000 more by means of the two drafts on the First National Bank of New York. No book-keeping -no matter how mysterious, no matter by what method, whether single or double entry-can cover a transaction of that sort. Men cannot acquire rights by a mere slip of paper directing credits to be given to themselves; $200,000, $400,000, and $600,000 cannot be realized by making a charge and credit ticket. The man who does this, does a willful wrong and a criminal act, When, upon the strength of credits thus obtained, he draws money from the national bank of which he is an officer, he is guilty of the criminal offense described ill the statute. We come now to another transaction, on the twenty-eighth of February, 1887,' when a certificate of deposit for $300,00Q is issued or made out by the Fidelity National Bank, and forwarded to the Chemical National Bank of New York. The defendant states that he gave his own check for that certificate. The books of the bank containing defendant's individual account, exhibited before you, show no such charge against him, and the expert witness testifies that there is no such check charged to his account, so that the bank never got the equivalents for the certificate of$300,000 thus forwarded to the Chemical National Bank of New York, and placed to the credit of the Fidelity National Bank. But on the same day that this certificate is forwarded, as admitted by the defendant, he makes out a charge and credit ticket by which that $300,000 is charged to the Chemical National Bank and credited to himself on the books of the Fidelity National Bank. That, in the light of the testimony before you, if you believe it, was a false, fraudulent, and fictitious credit; and when the accused subsequently drew from the bank the amount so represented by the credits taken to himself, and used it in these wheat transactions, whether through J. W. Hoyt, or Wilshire, Eckert & 00., he wrongfully misapplied funds of the bank which he was not entitled to; and he thereby committed a fraud upon the bank, and a criminal act in the eye of the law. What more was done in that transaction? This $300,000 certificate of deposit goes to the Chemical National bank, and is there placed to the credit of the Fidelity National Bank, and on March 9th a draft is' made in favor of J. W. Royt, by Benjamin E. Hopkins, assistant cashier, and which the defendant approved, and which goes ultimately into his account for the sum of $75,000 on the Chemical National Bank of New York. This draft is indorsed by said Hoyt and turned over to Kershaw & Co., and which Kershaw & Co. collected through the American Exchange National Bank of Chicago, and used the amount in wheat transactions, in which said Hopkins and the defendant were jointly interested. On the fourteenth of March that transaction is repeated and a draft for $15,000 given to Hoyt on that same fund :which Hoyt indorsed to Kershaw & 00., and which KE'rshaw & Co. not only collected, but used like they did the draft tor $75,000 for the benefit of Benjamin E. Hopkins, in the purchase of 'Wheat on margins; and in these transactions for account of Hopkins, the defendant tells you he was personally interested. Now, what is the ra-
UN1TED STATES V. HARPER.
suIt of that transaction? $300,000 of the moneys of the bank is by a false credit wrongfully placed at the disposal of the defendant here. The amount represented by that false credit is withdrawn and used for his personal benefit in those wheat transactions. And, while the amount of the certificate of deposit is standing to the credit of the Fidelity National Bank, in the Chemical Bank there is drawn against it in favor of Hoyt, two drafts amounting to $90,000, under date of March 9th and March 14th, which are indorsed over to and used by Kershaw & Co. in the purchase of wheat for the account of the parties represented by Hoyt. What is the result? $300,000 is appropriated by the defendant here by means of the false credit taken to himself, and $90,000 more is taken out of the bank's assets by means of these drafts in favor ofRoyt, and for the joint account of the defendant and Hopkins. While the bank's assets and credits are thus being misapplied here, that certificate of deposit for $300,000 is still held by the Chemical National Bank as a subsisting liability and outstanding obligation of the Fidelity National Bank. Now, I say to;you, as I said before, that the law looks through all forms and instrumentalities or methods of book-keeping by which such transactions could be accomplished. It is unlawful, it is fraudulent, it is criminal in the highest sense of the law within the meaning of the statute. Now, it is not necessary or material to trace or follow each specific draft or le'llter of credit used in these extensive transactions; for, having determined their character by established facts, y.ou may read the details in the light which they reflect upon the whole transaction. Let us come now to the credit of $285,000 that was placed on the and, as one of the book-keepers books of the Fidelity National which he denies, and you must testified, by the authority of Mr. therefore determine that fact. On the twenty-eighth of May, 1887, there is placed or is given a credit to Irwin, Green & Co. of $285,000, and at various dates that account is debited; first, 83,668.75, which one of the counts charges to be a false entry; it is next debited with which one of the counts charges to be a false entry; it is next debited with $40,537.50, which one of the counts charges 10 be a false entry; it is next debited with $1,443.75, which one of the counts charges to be Ii false entry; and next debited $123,206.25, aggregating $174,60G.25, all of which are charged in the indictment to be false entries, or false debits. Now, on the thirteenth of June, 1887, Irwin, Green & Co. checked against that credit; but it is not pretended in the evidence that they ever deposited a dollar, or gave any consideration whatever for that credit. But on the thirteenth of June they checked against that credit for the sum of$70,000. Taking that $70,000 with the debits previously charged, make up the sum of $244,606.25, leaving a nominal balance of $40,393.75; now, how was that $70,000 paid, and how was that balance of$40,393.75 arranged? These two sums, aggregating $110,393.75, how were they arranged? For the defendant has stated in his evidence before you that he knew of this transaction, but did not know of this $285',000 credited to Irwin, Green & Co. at the time it was given, but he knew Hopkins was using this credit in the purchase ofwheat through
Irwin,' Greeil & Co., as, well as other brokers in Chicago, and admits that he was interested with Hopkins in the wheat transactions. Now, how was this balance arranged? It was arranged by two checks given by Mr. Hopkins, and put in the teller's drawer as cash, as stated by one of the witnesses, amounting to $110,393.75. Then what was done? It was stated in the evidence by the witnesses that Mr. Harper came and took out..these two checks of Mr. Hopkins that were intended to square that Recount, and substituted two checks of Wilshire, Eckert & Co., one of them for $100,000, and one for $11,500, which was dated October 12, 1886;being the $11,500 check which the defendant stated to you had been giv:en to him about some old bond transaction in the fall of 1886; so that' the $70,000 draft ofIrwin, Green &Co., on the Fidelity National Bank,tind the balance of $40,393.75to their oredit, was first covered by the. Qbecks of Hopkins; which were held for a while as cash, and then .the defendant took the checks of Hopkins out and substituted as so much cash these two checks of Wilshire, Eckert & Co.,---:-one bearing date of ,May.30, 1887, and .the, othE'r bearing date of October 12, 1886; the one ()f May 30th for· $100,000, and .the one of October 12th for $11 ,500. These two checks are of Wilshire, Eckert & Co., aggregating $111,500" and excee.dedthe Hopkins checks by th4il sum of $:L,106. 26, and for this excess the· defendant took· credit to himself in his individual account. Now, gentlemen, it was known to the defendant, as he. adnlits, before that money..:....the $70,OOO-was paid, that that was a fictitious credit which had been given to. Irwin, Green·&. Co.; he had learned that, he states, It is shown that that &70,000 went out of the bank in cash, and without consideration. The others were entries. That 870,000 went out oithe bank I and welit out by the knowledge and with his consent, if you believe. the evidence. The defendant, in this statement, before, ontbe examination of his counsel, says that he was interested with Hopkins in the ttaIlBactions that were carried on by and through the broker J. W. Hoyt, who employed Irwin, Green & Co. to make the purchases of wheat in Chicago.· That hIS interest-which led him into it-was his anxiety !to save the, bank, in which he has stated he had a large controlling interest, and then, after sllving the bank and refunding what it had advanced, to divide the profits with Mr. Hopkins. Now, look fora·moment what went out of the bank on that wheat transaction carried name of Hopkins. There went to Irwin, Green & Co., through.J. W. Hoyt, on that deal, as it may be called, for the account of Hopkins and for the defendant, out of the funds of the Fidelity National bank, the sum of $555,381.25, for which the checks and drafts were here exhibited and identified before you.. There went through Hoyt to the,firm of C. J. Kershaw & Co. on this same account, and for this same purpose, and out of the bank's money, the sum of $273,000, for which drafts and checks were presented in evidence. There went through the same source, J ·· W. Hoyt, to Orr & Comes, $50,000 on that deal out .of the funds of.tbe bank; and there went to Irwin, Green & Co., 870,000 on that false'creditof$285,000. These amounts are connected with the deal or speculation ill wheat in which the defendant admits him-
UNITED STArns ;'11. HARPER.
self to have been interested with Hopkins. Then, recurring for a moment to the three charge and credit tickets, dated February 12th, February 28th, and March 2<1, aggregating $700,000, the whole of which the defendant took to himself as a credit, by the mere writing on a sli jJ of paper, "Credit me," and which he used as his account shows. He took to himself that $700,000. If these amounts had been charged to him, as the proof of the clerk who kept the individual account explained to you, his account on the twentieth of June would have been overdrawn between $700,000 and $800,000. Supposing these two amounts had been charged to him, to say nothing of the drafts which he drew in favor of Wilshire and Hoyt, which would have added to that amount and made his account overdrawn in the neighborhood of $900,000. Now, in addition to the amounts advanced, as I have stated, on what is called the Hoyt and Hopkins wheat deal, directly in cash, there are outstanding liabilities against the bank made by means of letters of credit; there appears from the e\'idence to be due to Kershaw & Co. and Irwin, Green & Co. on letters of credit that are still outstanding, large balanceEl, which they claim; Irwin, Green & Co. still claim on that $285,000 credit a balance of $215,000; Kershaw & Co. still claim $781.25. We come now, later on, to another transaction, when the bank was in distress,-when by reason ofcirculars, or otherwise, suspicion was aroused that the bank was going under, and the run commenced upon the bank. On the fourteenth ofJune, on the evening of that day, after the close of banking hours, the Vice-president, the assistant cashier, and Mr. Wilshire are together at the bank, having previously telegraphed the American Exchange National Bank of Chicago, as stated by all the parties, and as proved by the government, that they concluded to telegraph to the American Exchange National Bank, to know if $600,000 would keep the deal afloat. They got an answer that gave them ground for encouragement, and on the evening of the fourteenth of June, $1,000,000 of bills receivable of the bank were taken and sent by the action of these parties to the Chemical National Bank of New York. Now, contemporaneously with the sending of this $1,000,000 to New York, $600,000 in drafts and letters of credit of the Fidelity National Bank-$400,000, in drafts, and $200,000 in letters of credit-are drawn out and placed in theharids of Wilshire and Gahr by the defendant, to be carried to the American Exchange National Bank of Chicago, to sustain this wheat transaction. The defendant tells you in his testimony, that when that run commenced, and when he was calling for help in all directions, and trying in every way to save the institution, this $1,000,000 of the bills receivable of the Fidelity National Bank were Bent to New York to the Chemical National Bank, as collateral in order to lay the foundation and provide a credit to sustain the bank. But in the very act of sending these collaterals as a basis of credit for the bank, he was drawing on the Chemical Bank to the amount.of $600,000 for illegitimate and criminal purposes. These four drafts for $100,OOOeach,and the letters of credit for $200,000, issued on the evening of June 14, 1887, are still held as subsisting or outstanding obligations and liabilities of the bank) therefor. which never looeived
Gentlemen of the jury, the defendant has explained to you, and which, by the way, is not competent nor relevant to this transaction, that at this time he was making desperate and heroic efforts to save the bank. This is not relevant in this case. The man who scuttles a ship may, as she is in the act of sinking, exert desperate and even heroic efforts to save it from the peril which his own wrongful act has produced; but such efforts do not change the character of the wrongful act which put the vessel in danger. If I were to wrongfully fire upon you and produce a dangerous wound, I may, with all my skill and energy, try to stanch the flow of blood, but it does not change the criminal act which produced the wound. If he had intended to refund all those moneys, and had had the means to do it, and had come in on the morning of the twentieth of June and said, "I have taken out $2,800,000 from the funds of this bank"and here is the money in gold coin to replace that sum," it would not change the criminal character of the previous act. So, gentlemen. doubt: be misled by anything of this sort. Subsequent efforts to remedy,or avoid the consequences of criminal acts can never condone the commission of the wrongful and forbidden offenses. It is not necessary that the funds of the bank should have been drawn or paid out for the defendant's exclusive benefit; if, as he admits, he was interested in the wheat transactions conducted through J. W. Hoyt in the name of Benjamin E. Hopkins, and he knew that the funds of the bank were being used in these purchases, he is equally as responsible. civilly and criminally ,as though they were used exclusively for his own account. Now we come to the wheat transactions which were conducted by Wilshire, Eckert & Co., and J. W. Wilshire & Co. There was taken out of the Fidelity National Bank. as the evidence discloses, in cash,on the individual or personal checks of these parties. that were never presented orintended to be presented to the banks on which they were drawn, but were held by the direction of the defendant as cash, over a million dollars, and in addition to that amount, in actual cash, they took out in letters of credit $350,000. Now. how and why was this done and per" mitted? The explanation of the defendant in regard to these transactions, is this: He states that in the spring or summer or early part of September,,1886, J. W. Wilshire, by means of wheat transactions, had lost, and owed the bank, about $200,000; that in October, 1886, said Wilshire, in the absence of the defendant, got an additional loan through one of the cashiers of $26,500; and that along in February, or early in February, 1887, in .hh; absence, said Wilshire got a draft certified by the cashier, and obtained the money on it, for $60,000 or more. The defendanttells, you on the stand that his eyes began to open in the fall of 1886. when Wilshire wanted more money for wheat speculation; when he talked roughly to him, and told him that he had got these two checks of$26.500 and of $60,000 in his absence, and without his knowledge, from the cashier. What then? Havipg that much money at stake, the defendant tells you that he concluded that he would stake Wilshire further, and see him through the wheat deal, which he says was Wilshire's wheat deal, and not his own. Time goes on, and by the means of Wilshire's checks or the checks of WilshirejEckert & Co., there is
withdrawn from the bank,with the knowledge and consent of the defendant, $1,446,000 in cash and letters of credit, as shown by the books of the bank, to help Wilshire in his dangerous and hazardous wheat speculation, in order to save the $86,500 which Wilshire got improperly before. Now, gentlemen, if you believe the testimony of the defendant, he knowingly permitted Wilshire to withdraw and misapply the funds of the bank, and in so doing violated the law by doing just what the law intended he should not do. Suppose a gambler had come and said to him: "Mr. Vice-President, I have lost $40,000, $60,000, or $80,000 in betting at a faro bank; and I have obtained that money from your bank; and if you do not give me more money, to carry me through,in order to win back the money I have already borrowed and lost, you will be in danger of losing the $80,000;" and the bank officer thereupon furnishes him the money of the bank day after day, month after month, to be used in gambling. I need hardly say that this would not be a legitimate transaction. The officer of the bank so dealing with its funds would be as guilty-criminally guilty-as ifhe had himself withdrawn the D'l:'Olley, and squandered it at the gaming table. The funds of a national bank cannot be legitimately put, by an officer thereof, at hazard upon the chances of a rise or fall in the market price of any fluctuating commodity. So, gentlemen, the court instructs you that on the statements made by the defendant on the stand, assuming that Wilshire, Eckert & Co., or J. W. Wilshire & Co. were the real principals in the wheat transactions which they conducted,-on his own testimony, here in the prllSence of the ct;>urt and jury,-he admits that he committed an act which the statute was passed to prevent. Bank officers cannot deal with money intruf'ted. to their care in that way. It is an illegitimate, unlawful,and dishonest exercise of authority, so to employ the funds of the bank; and when it is knowingly done, the officer permitting it is responsible. But were those transactions conducted for the benefit of J. W. Wilshire, or Wilshire, Eckert & Co.? They swear before you that they were acting far the defEmdant. Hoyt testifies that he understood that he and Wilshire, Eckert & Co. were representing the same principals, and on the strengtb ofthat funds standing to the credit of Hoyt on the books of c.;r. Kershaw & Co. of Chicago, are transferred to the credit of Wilshire, Eckert & Co. to the extent of $600,000 or $700,000. The prosecution introduced orders and directions in the handwriting of the defendant,for the purchase of wheat, which the defrmdant says were mere m.emoranda oiadvice; but it is for you, gentlemen, to determine how that is; you niust look at his position as defendant, and at his interest in the statement. Then look at the other testimony, and see whether the truth lies with the statement of Wilshire, Eckert & Co., corroborated as it is by the written orders and directions of the defendant, and other testimony in this case; if the truth lies with Wilshire and with Eckert, and with the papers here presented, then the defendant, in addition to the amounts drawn out,by has crirfdnally, for his own use, drawn through Wilshire, Eckert & Co. $1.466,000 of the bank's assets, and applied them as Wilshire swears t() the purchase of wheat on margins for defendant's
Il.ccount,·which margins were wrecking an institution which ought to s,erved and cou14 have served a useful public purpose and function. . The verdict must respond to each count in the indictment, for the reason that each contains a distinct and substantial, charge against the defendant. If you find he is not guilty on all of the charges in the ment, you will return a general verdict of not guilty. If your verdict is guilty on all the counts, you ",ill say by your foreman, "We find the defendant as charged in the indictment." If you find him guilty on somecouuts and not guiltyqn others, you will specify accordingly. I congratulate you, gentlemen., .on the termination ofa long and tedious case. I leave it in your bands, feeling assured that from the close attention you have given the evidepce as it was introduced, you will return an honest, upright, and just verdict, and a deliverance make between the government and the accused. , .The jury returned a verdict of guilty as charged in counts of the inl1ictment.
(C7ireuit (JOWl't, E. D. Miofi,igan. January 9, 1888.)
. Where the alleged violation of a copyright consistll in excerpts from com· plainapt's book, the court Is bOUlld to consider not only the quantity and quality Of the, matter appropriated,- but the intentioll with which such appro· priationis'tnade, the extent to, which the complainant is injured by it, and the damage to'the defendant by an injunction. . 2. SAME-INJUNOTION-DAMAGES. 1t 'eBm,that the complainant Is not always bound to prove pecuniary damage to entitle him to an injunction. 8. SAME-ExcERP'rS FROM BOOK-8EPARATJON OF ORIGINAL MATTER. Wherethepiracy consists of extracts from different parts of complainant's pUblication,. scattered through defendant's book, and it is impossible to separate these from the oriltinal Iilatter, is proper to apply the doctrine of con· . fusion of goods, and enjoin the whole book. 4. SAME. ButU.the·pirated matter can be, separated from the rest of the book, the injunction should extend only to that portion of the book containing the pirat,ed Iilatter; especially where 'the ,uppression of the whole is likely to lead to c'onsequences to the defendant out of all proportion to the damal\'e done tothecoIilplainant. 5. SAME. ',', ." , Complainant was the author and proprietor of an elaborate book of 1,024 pages, entitled" A History of Detroit and Michigan, or the Metropolis Illustrated." Defendant's pUblication a pampblet of 274 pages. entitled "The Industries oj' Detroit;" the tlJst7 ·.pa"ges f which were mainly historlcal. and contained about 100 short extracts fr.Clm' the complainant's book. The' reo maining·2tOpages consisted;of"'lid"ertisements only. Held that, as three· fourth,SOf the, frQmcomplalnan, t's book, f.md pra,ctically all to which he could I'y cIaiIil as original mMter, were contained in, the first, chapter, be· first 11 pages of the pamphlet, the injunction should extend only tothIS portion of the publication. , (8t!I14buf bIJ.t1rA Oourt.)
.. OOPYRrGBT-EXOERPTS nOM BOOK-PROOF 01l' INFltINGEMENT·