Spence v. State , 20 Ga. App. 61 ( 1917 )

George, J.,

concurring specially. While the decisions of this court, hereinafter referred to, are controlling, I can not agree that those decisions are sound, and I am unable to concur in certain conclusions reached by my colleagues. The defendant was convicted under an indictment charging fraudulent insolvency of a chartered bank, as defined in section 204 of the Penal Code of 1910. The solicitor-general who prosecuted the case was a depositor in the alleged insolvent bank; the presiding judge was related within the third degree to a named depositor in said bank; several of the grand jurors who returned the bill of indictment against the accused were related within the prohibited degrees to certain depositors of said bank; and the court refused, upon timely motion of counsel for the accused, to inquire of the trial jurors whether or not they were related by blood or marriage to the depositors in said bank. -1 can not agree to the proposition that one who is related within the prohibited degrees to a depositor of an insolvent bank is competent to sit as a juror upon the trial of. an officer of such bank charged with violating the provisions of section 204 of the Penal Code. It must be admitted that this precise question is foreclosed against the accused by the decision in Stapleton v. State, 19 Ga. App. 36 (91 S. E. 1029), and by the majority opinion in Griffin v. State, 18 Ga. App. 402 (4) (89 S. E. 625). The opinion of the dissentient judge in the case last cited seems to be conclusive. To what is there said the writer wishes to add that section 204 of the Penal Code was enacted primarily for the benefit of the public,—that is, creditors, including depositors. Protection to this latter class of creditors was the primary purpose of the legislature in the passage of this statute. Stockholders, as such, are amply protected against the criminal acts of the officers and directors of a chartered bank by the several provisions of our code.

In this case the court charged the jury as follows: “The stock of a bank is a liability that should be included and taken into account in determining the question of its solvency.” This, in the opinion of the writer, is an erroneous statement of the law. It must be admitted that in the Stapleton case, supra, this precise question was also ruled upon adversely to the contention of the accused, although in the opinion in that ease the question is not discussed. The majority opinion in the case at bar treats the assignment of error upon this charge as having been abandoned. The 20th division of the opinion is as follows: “None of the remaining grounds of the amended motion for a new trial being specifically urged in the brief of counsel for the plaintiff in error, they will be treated as abandoned.” The exception to the portion of the charge quoted is one of the “remaining grounds of the amended motion for a new trial.” If the question were not one of such vital importance, I would be disposed to agree .with my brethren in the conclusion, that counsel for the plaintiff in error have not specifically urged before this court the complaint made as to the charge of the court quoted above. If, however, the tendency is to disregard purely technical objections when urged by defendants in the trial of criminal cases, much more should the reviewing court refuse to sanction technical objections when urged by the State against the consideration of a vital and controlling question involved in the case. While counsel for the present plaintiff in error have not -in their briefs specifically argued the exception taken to the charge of the court under consideration, this failure of counsel should be interpreted to mean that they regard the question as fully presented to this court in the companion case of Stapleton v. State, supra. They expressly state the contention and disclaim any intention to abandon it. It is proper to note that counsel for the present plaintiff in error were also counsel for the defense in the Stapleton case, in which the question here referred to was fully argued. I therefore think that we should consider this exception.

Does this charge lay down a correct test by which the solvency of a chartered bank is to be determined ? Is a bank solvent only when its assets are sufficient to pay not only its creditors, including depositors, but its stockholders as well? If this rigid test is to be applied, every bank, immediately upon its organization, will be found to be insolvent. Furniture and fixtures and general supplies must be purchased by every bank commencing business. A newly organized bank would hardly, in any case, be able to dispose of its furniture and fixtures, to say nothing of its general supplies, at cost. The officers and directors of a bank usually own a large part of its capital stock. It is stretching the law too far to say that bank officers and directors owning a large percentage of the stock of the bank become criminals the moment its assets fall below its liabilities, including the liability of the bank upon the stock held by such officers and directors. The individual stockholders and the corporation are not one and the same, it is true, but if the officers of a bank, who own practically its entire capital stock, are able to pay, out of its assets, all creditors of the bank, they ought neither to be presumed nor held guilty of the offense declared in section 204 if the assets of the bank are insufficient to pay the stockholders, including themselves. If, on account-of the fraudulent acts of the officials, the assets of the bank are insufficient to pay the general creditors of the bank, including depositors, such officials are criminally liable. If, through the criminal conduct of the officers and directors of the bank, its capital stock is impaired, the stockholder has his recourse against such officials under other sections of our Penal Code. The capital stock, it is true, is both au asset and a liability upon the civil side of the law, but to regard the stock as a liability in determining the solvency of a bank under the Penal Code section referred to is, in the opinion' of the writer, untenable. No consideration of public policy requires such a construction of this section of the code. The stockholders in a banking corporation become such for pecuniary gain to themselves. In no other corporation are stockholders, by any section of the code, given the benefit which the charge of the trial court in this case affords the holders and owners of bank stock. Sound public policy will protect the owner of bank stock no further than the owner of any other corporate stock. He must look for his protection to the embezzlement statutes and other statutes enacted for his benefit, and to the honesty of the officials of his own choosing. Further, an individual is not considered insolvent so long as he is able to pay his creditors. A corporation should not be considered insolvent so long as the corporation is able to pay, out of its assets., including its original capital stock, all of its creditors. The stockholder is in no proper sense a creditor of the bank. He is the owner of a portion of the capital stock of the bank.

For the reasons stated above, I do not think the defendant has had a fair trial. He was entitled to a jury whose kinsmen had lost nothing in the failure of the bank. He was entitled to an instruction by the court to the effect that the bank was solvent if its assets, administered in due course and with ordinary skill and diligence, were sufficient to pay its debts, excluding its stock liability. The decisions in Griffin v. State, and Stapleton v. State, supra, should he reviewed and overruled. See, in this connection, the decision of 'the Supreme Court, in reference to certified questions from this court, in the Griffin case, 142 Ga. 636 (4), 646 (83 S. E. 540, L. R. A. 1915C, 716, Ann. Cas. 1916C, 80).