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loans shown by the reports to the Comptroller of the Currency, and neither knew of, nor consented to, the credits made up of the Leonard, Kemp, and similar notes. It is further contended by the government that the defendant made false and misleading reports and statements to the Comptroller of the Currency in various particulars; reporting in one instance no overdrafts against himself, when in fact he was overdrawn to the extent of $2,814, and failing constantly to show that he was indorser or guarantor or payor of this large sum represented by the Leonard and other similar notes, of which he admits he got the benefit, and for which he claims and admits he had guarantied the payment to the bank.
It is further contended that he caused a false entry to be made upon the books of the bank, creating a false credit in favor of the bank of about $1,353, and a false charge against the Carolina Savings Bank of the same amount, for the purpose of deceiving the bank examiner, who arrived unexpectedly. You will recall and consider the evidence in that regard. It is claimed that, without authority, he signed the name of W. W. Rollins to two notes, for $1,000 each, dated April 6, 1897, and sent them to other banks in renewal of other notes theretofore in such banks, and which had fallen due. This contention, I understand it, is admitted by the defendant, who claims to have afterwards communicated the facts to and received from Maj. Rollins a ratification of his act. This is denied by Maj. Rollins, who says he never knew anything of the transaction until he saw the notes at this trial, and who says that, when he saw these notes at a former trial, he knew they were not signed by him, but supposed they were copies of notes of his own signing, although he had never, to his knowledge, signed notes to exceed $7,000, in the aggregate. And I call your attention to the fact that even the defendant does not claim that he ever communicated these facts to the bank, or to the other banks in which these notes were rediscounted.
The government also contends that the defendant made a false statement to Col. Burgwyn, bank examiner, in June, 1897, a short time before the failure of the bank, as to the financial condition and responsibility of Kemp, the colored driver of the defendant. You will recall the evidence as to this. It is further contended by the prosecution that the defendant received a good and valuable credit through the Purefoy transaction of $3,000, and that when Dr. Purefoy withdrew the money loaned, by means of his check, he was suffered to appear as having overdrawn his account for a time; the apparent overdraft being eventually covered by a note of no value.
All of these and similar transactions were introduced by the government merely for the purpose of showing knowledge and intent, and, of course, have no other bearing upon the charge in the indictment.
There is a transaction, however, which it is contended by the government has a somewhat closer relation to the offenses charged in the indictment. It is contended, and not denied, that in the month of July, when the bank was tottering to its fall, collections aggregating about $17,000 were made by the First National Bank of Asheville for other banks, and that the funds so collected were deposited in the bank by the bank's collector, and checks were drawn by him upon the Chemical National Bank of New York in settlement thereof, and signed by the defendant as president, but, by direction of defendant, these checks were not sent out, but were withheld until after the bank closed its doors. According to the testimony in the case, a number of the checks of the defendant were paid out of funds in the bank after the time when these remittance checks were drawn and withheld, and the prosecution contends that the defendant knowingly withdrew to that extent this money, which honesty and good faith required should be applied to these remittances, leaving the bank, to that extent, indebted to these other banks for moneys belonging to such banks, and which the First National Bank of Asheville had received, and which the defendant had wrongfully embezzled, abstracted, and misapplied, with intent to injure and defraud. The defendant contends that in all of these various transactions he acted honestly and in good faith; that he believed himself to be, and knew that he was, solvent and able to pay his debts. You will recall his testimony. He admits that all the time, since 1894 at least, his obligations to the bank were growing by leaps and bounds, and that in face of the fact that during the period from January 1, 1894, to January, 1897, inclusive, the dividends from his bank stock credited to his account amounted to $11,500 and over, and his salary to over $6,000 more. Notwithstanding these facts, he was putting in bank more and more of these notes of Leonard, Kemp, etc., to pay interest, and interest on interest. He explains the necessity of the increase of the Rollins notes from $7,000, the original amount for which he agreed in 1892 to save Maj. Rollins harmless, to $9,400, the amount when the bank failed, by a calculation showing that the accrued interest on these notes would have increased them to the latter figure, and avowed his inability to pay this interest as the reason for having taken the liberty of signing Maj. Rollins' name to the two $1,000 notes on April 6, 1897. Gentlemen, it is for you to consider whether such a state of financial paralysis is consistent with his statement of an absolute solvency on his part, or his belief in it. Indeed, in his testimony the defendant has tried to make it appear that after January, 1894, he obtained no actual money from the bank, and that the increase of his obligations to it from $80,800 to $114,000 arose solely from accumulations of interest which he was unable to pay. The government, on the other hand, contends that he never ceased drawing money from the crippled bank by check until July 21, 1897, the date of the last transaction charged in the indictment.
I have neither the time nor the inclination, gentlemen, to refer further to the evidence in this case. The facts and the contentions have been fully and ably argued before you by the learned counsel on both sides. It is now to be submitted to your honest, conscientious consideration as sworn jurors of the United States court for this district.
One word more, and I have done: When you have retired to your room and considered of your verdict, and have taken your ballot, it may be that you will not view the evidence alike; that its effect upon the minds of a portion of you may be weaker or stronger than upon the minds of the remainder. In that event, I would say to those of you who may find yourselves in the minority you should not too hastily conclude that your brethren are wrong, and you alone right. If you of the minority are for conviction, you should ask yourselves, “Is the evidence of guilt which fails to convince a majority of my brethren of the guilt of the accused beyond a reasonable doubt in truth so strong as I thought it was?” If you are for acquittal, you should inquire of your own heart and mind, "IS the doubt in my mind, and which fails to appeal to the reason of my brethren, indeed a reasonable doubt, or is it founded upon some prejudice, or induced by a desire of avoiding the responsibility of decision?” Ask yourselves these questions, talk the matter over with your brethren, with a view of arriving at a true and just conclusion, and you will be in a fitting frame of mind to reach it.
A word as to the form of your verdict: If you should find the defendant not guilty upon all the charges against him, you will return a general verdict to that effect. If you should find him not guilty upon all of the counts for embezzlement, but guilty upon one or more counts for abstraction and willful misapplication, your verdict should be, “We, the jury, find the defendant not guilty of embezzlement, as charged in the within indictment, but we do find him guilty of abstraction and willful misapplication, as therein charged.” If you should find that he is guilty upon one or more of the counts for each of the offenses of embezzlement, abstraction, and willful misapplication, you may find a general verdict of guilty.
I now dismiss you to your room with a solemn adjuration to do your duty as you see it, without prejudice, without favor, and without fear.
HOLST et al. v. SAVANNAH ELECTRIC CO. et al.
(Circuit Court, S. D. Georgia, E. D. July 16, 1904.) 1. MUNICIPAL CORPORATIONS-POWERS OF COUNCIL-GRANTING OF STREET
FRANCHISE BY RESOLUTION.
The mayor and council of the city of Savannah, Ga., are authorized by the city's charter (MacDonell's Code, p. 12, $ 32) to make, ordain, and establish "by-laws, ordinances, rules and regulations,” but nowhere, in terms, to legislate by resolution; and in view of cognate provisions requiring the improvement of streets, regulating the speed of street cars, etc., to be by ordinance, and of section 14, which provides that the city may either build street railways, “or let or farm the privilege to indi. viduals or companies under the conditions and at such rates of fare and other charges as the city council of said city may by ordinance determine,” the mayor and council have no power to grant a franchise to a street railroad company to occupy a street with its tracks by a resolution. and such a resolution passed without notice to owners of property on the street affected, and without prior publication as required by the charter in case of ordinances, is void and confers on the company no right or au
thority. 2. CONSTITUTIONAL LAW-TAKING PROPERTY WITHOUT COMPENSATION.
The owners of property fronting on a street may maintain a suit in equity in a federal court against the city and a street railroad company,
both of which are corporations of the state, to enjoin the laying of tracks in the street under a void enactment by the city council purporting to authorize such act, where irreparable injury will result to their property, as a taking of property under color of authority from the state without due
process of law. 3. EQUITY JURISDICTION-PREVENTING MULTIPLICITY OF SUITS—ADEQUATE
REMEDY AT LAW.
Such suit is within the jurisdiction of equity, where the complainants are numerous, on the ground that it will prevent a multiplicity of actions,
and for the further reason that there is no adequate remedy at law. 4. INJUNCTION-USE OF STREET-STREET RAILWAY.
For a municipal corporation, over the protest of every abutting lot owner on a residence street, to refuse them a hearing, and grant in secret caucus to a street railway the right to appropriate said street for its track, to be used to shunt all the empty cars in use in the city into the c'ar barns at midnight and to distribute them at dawn, thus destroying the quiet, repose, and comfort of many homes, when the railway has a parallel track one block away, long used, and ample for such purpose, is unnecessary, unreasonable, and oppressive municipal action, and should be enjoined by a court of equity having jurisdiction.
In Equity. On motion for preliminary injunction.
The complainants before the court are J. B. IIolst, A. J. Ives, Lena Anderson Myers. J. J. Cummings, R. P. Lovell, Mary Ganahl Stovall, Henrietta Seabrook, Sarah 0. Adams, all of whom are citizens of the county of Chatham. state of Georgia, and Emma L. Carrington, who is a citizen of New York, and resident on Long Island. The respondents are the mayor and aldermen of the city of Savannah and the Savannah Electric Company. The bill is brought in behalf of the complainants and other property owners whose interests are also affected. These, with the complainants, are 42 in number, and include, without exception, every owner of a lot abutting on that portion of the street involved in the controversy, and which, as will be seen, the mayor and aldermen of Savannah have resolved that the electric company may appropriate in part for its own uses. The bill alleges the additional value of their homes resulting from the quiet of the street and its freedom from cars and other disturbing noises; that the Electric Company, without first offering to pay compensation in any amount, is proceeding to erect poles, string wires, and lay tracks under pretended authority passed by the mayor and aldermen of the city near the hour of midnight on the 25th of May, 1904; that this was done without any notice whatever being given to the public of such intended action ; that the resolution was read but once, the law requiring that all ordinances and resolutions, to become laws, shall be read twice, and published for two weeks in the public gazette; that the resolution is illegal and void ; and that the Savannah Electric Company acquired no right thereunder. It is further alleged that the fact that the mayor and aldermen were considering the grant to the electric company of the right to thus use the street was purposely kept secret for the purpose of preventing plaintiffs and other property owners affected, from protesting against the resolution, but, anticipating a movement of this character, the plaintiffs and 59 other property owners and residents had petitioned, in writing, the mayor and aldermen of the city to permit them to be heard whenever the petition of the electric company should be presented to the body for action. This request, it is charged, was ignored and utterly disregarded, although they were assured by the mayor of the city of Savannah that they would be given ample opportunity to be heard. In this petition it is further alleged that the complainants notified the governing body of the city that to grant such resolution would cause irreparable damage to them and other owners of property and residents on said street. Notwithstanding this, the mayor and aldermen of the city immediately proceeded to grant and did grant the electric company the right to lay its tracks, string its wires, erect its poles, and operate its cars on said street. This, it is charged, will deprive plaintiffs of their property rights without due process of law, in contravention of the Constitution of the United States, and without compensation having been first paid, as required by the Constitution of Georgia. Special averments of damage allege that J. B. Holst will be prevented from using the street in front of his property, and that the same will be damaged in at least the sum of $3,000. The property of A. J. Ives, Lena Anderson Myers, J. J. ('ummings, R. P. Lovell, and Mary G. Stovall, it is alleged, will be damaged, each, in the sum of $2,000. The property of Henrietta Seabrook, it is alleged, will be damaged in a large sum, as will also the property of Sarah 0. Adams. Mrs. Carrington, the New York complainant, who also owns an abutting lot, lays her damages in the amount of $2,500. It is further alleged that the appropriation of this portion of Gwinnett street is wholly and entirely unnecessary for the public convenience, benefit, or necessity, and is entirely for the convenience of the Savannah Electric Company, a corporation which already owns all the street railways in the city of Savannah. It is alleged to be unnecessary and unreasonable, because the electric company already has a line on which its cars are operated now on Bolton street, which is the next street south of Gwinnett, and parallels the same, and which can be used by the corporation for its purpose just as conveniently as Gwinnett street. This purpose is to run its empty passenger cars into its car barn at night, and to distribute them in the morning. It is charged that the Savannah Electric Company, within a few hours after the passage of the resolution, and before the public had become aware of its passage, had commenced the work of laying its track, erecting its poles, and stringing its wires, and, if permitted to continue with this work, and operate its cars on the track thus laid, that plaintiffs will suffer irreparable injury therefrom, and that this injury will be inflicted unless prevented by a suitable order in equity. All of this conduct, it is charged, is in contravention of the relating provisions of the Constitution of the United States. It is alleged that the Savannah Electric Company is chartered by the state of Georgia; that the mayor and aldermen of the city of Savannah, acting under assumed authority from the state of Georgia, and as an agent of the state for governmental purposes, has availed itself of the governmental agencies furnished by the state to unlawfully grant authority to do the unlawful acts complained of, and that the action of both defendants is therefore the action of the state, and that their conduct under color of its pre.. tended authority is to deprive orators of their property without due process of law. Waiving answer under oath, the complainants pray an injunction pendente lite to restrain the defendants from doing or continuing to do the Wrongful acts complained of. There is also a prayer for general relief.
In response to the rule to show cause, the defendant the Savannah Electric Company alleges that the court has no jurisdiction; that there is no equity in the bill; that no federal question is involved in the bill; that it states no cause of action, and makes no case for injunction or other relief; and that the complainants have adequate remedy at law. It denies that complainants will be damaged in any manner whatever, “cognizable by the Constitution and laws of the state of Geo ia," by the construction of the proposed tracks. It avers that everything was done by itself and the mayor and aldermen of Savannah in the utmost good faith, and to locate a greatly needed public improvement. It alleges that the kind of cars it proposes to run over that portion of Gwinnett are ordinary street passenger cars, making only such stops as are necessary for the purpose of receiving and discharging passengers; that this will put no additional servitude upon said street; that their scheme is a necessary part of a plan agreed upon between the mayor and aldermen of the city of Savannah and Atlantic Coast Line Railroad and the defendant to build a subway beneath the Atlantic Coast Line Railroad at Gwinnett street crossing in Savannalı. Defendant points out the great danger to which passengers are subjected by the grade crossing over the Atlantic Coast Line Railroad, and alleges its intention to abandon the line of street railroad on Bolton street, so that defendant's cars, instead of running upon Bolton street, thereby passing over the grade crossing, will be run upon Gwinnett street, and pass under instead of over the railroad, thus obviating the delay and inconvenience to which the public is put by reason of stopping for passing trains, and obviating, also, great peril and danger which passengers incur from passing trains; that. by reason of this arrangement, it will be necessary to take up tracks of the defendant on Bolton street, and, as part and condition of entering into the