Opinion · Supreme Court of the United States

Westfall v. United States

Westfall v. United States, 274 U.S. 256 (1927)

Type
Opinion
Court
Supreme Court of the United States
Jurisdiction
Federal
Date
1927-05-16
Topic
general

How later courts describe this case

  • defrauding a state bank that is voluntarily a member of the Federal Reserve System may be made a federal offense because of that membership
  • defrauding state bank which is a member of the Federal Reserve System is properly a federal offense
  • "`[W]hen it is necessary in order to prevent an evil to make the law embrace more than the precise thing to be prevented it may do so'"
  • proposition that State and Federal governments may punish same conduct “is too plain to need more than statement”
  • government’s burden to prove interstate commerce nexus for federal crimes is waived by valid guilty plea
  • “Of course an act may be criminal under the laws of both [state and federal] jurisdictions.”
  • states may enact laws imposing penalties for conduct that federal law also prohibits
  • “ [W]hen it is necessary in order to prevent an evil to m ake the law embrace more than the precise thing to be prevented C it may do so.”

Citator

UpLaw has not yet analyzed Westfall v. United States. The absence of a flag is not a finding that it is good law.

Cited by
149 opinions

Headnotes

  1. Constitutional Law — Federal Powers over State Banks in the Federal Reserve System Section 9 of the Federal Reserve Act, as amended June 21, 1917, is constitutional insofar as it provides that state banks that have joined the Federal Reserve System, along with their officers, agents, and employees, are subject to the provisions and penalties of Rev. Stat. § 5209, which punishes misapplication of a bank's funds. 274 U.S. at 258
  2. Criminal Law & Procedure — Concurrent Jurisdiction An act may be criminal under the laws of both the state and federal jurisdictions; the fact that the acts made criminal by federal law may also be punishable under state law does not render the federal statute invalid. 274 U.S. at 258
  3. Constitutional Law — Federal Power to Punish Acts Injurious to the Federal Reserve System Where a state bank chooses to join the Federal Reserve System, the United States may punish acts injurious to the System even though those acts are done to a corporation that the state is also entitled to protect; it is not a condition of Congress's power to punish such acts that they result in any loss to the Federal Reserve Banks, because every fraud weakens the member bank and therefore weakens the System. 274 U.S. at 258
  4. Constitutional Law — Necessary and Proper Scope of Federal Criminal Legislation When it is necessary in order to prevent an evil, the law may embrace more than the precise thing to be prevented; thus Congress may punish acts beyond those that directly cause the harm sought to be averted in order to effectively protect the underlying interest. 274 U.S. at 259
  5. Constitutional Law — State Corporations as Federal Instrumentalities Congress may employ state corporations, with their consent, as instrumentalities of the United States, and may make frauds that impair their efficiency crimes. 274 U.S. at 259
WESTFALLv. UNITED STATES,274 U.S. 256(1927)
47 S.Ct. 629
WESTFALLv. UNITED STATES.
CERTIFICATE FROM THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT.
No. 766.
Argued March 8, 9, 1927.
Decided May 16, 1927.
1. Section 9 of the Federal Reserve Act, as amended June 21, 1917, is constitutional in so far as it provides that state banks which have joined the Federal Reserve System, their officers, etc., shallPage 257be subject to the penalties of Rev. Stats. § 5209, which punishes misapplications, etc., of a bank's funds. P. 258. 2. The acts thus made criminal may be punishable also under the laws of the State. P. 258. 3. It is not a condition to the power of Congress to punish such acts that they result in any loss to the Federal Reserve Banks. P. 258. 4. When necessary in order to prevent an evil, the law may embrace more than the precise thing to be prevented. P. 259. 5. Congress may employ state corporations, with their consent, as federal instrumentalities and make frauds that impair their efficiency crimes. P. 259.
RESPONSE to a question certified by the Circuit Court of
Appeals arising upon a review of convictions under indictments
for aiding and procuring misapplication of state bank funds and
conspiracy to misapply them.
Mr. D.S. Face, with whomMr. Harry D. Jewellwas on the brief, for Westfall.Solicitor General Mitchell, with whomAssistant AttorneyGeneral Luhring, Mr. Harry S. Ridgely, Attorney in the Department of Justice, andMr. Walter Wyatt, General Counsel, Federal Reserve Board, were on the brief, for the United States.
MR. JUSTICE HOLMES delivered the opinion of the Court.
Westfall was convicted under two indictments, the first of which charged him with aiding and procuring the branch manager of a State bank which was a member of the Federal Reserve System to misapply the funds of the bank. The second indictment charged a conspiracy to misapply the funds of the bank between the same and other parties. Both were based upon the issuing a fraudulent certificate of deposit for ten thousand dollars and the paying the same from the funds of the bank. The Circuit Court of Appeals for the Sixth Circuit certifies thisPage 258question: "Is the provision of section 9, chapter 6, of the Federal Reserve Act of December 23, 1913 [38 Stat. 259, 260,] as amended June 21, 1917 [c. 32, § 3;40 Stat. 232,] and July 1, 1922 constitutional in so far as it provides that `such banks and the officers, agents and employees thereof shall also be subject to the provisions of and the penalties prescribed by Section 5209 of the Revised Statutes?'" The amendment of July 1, 1922, referred to is, we presume, c. 274;42 Stat. 821. It has no immediate bearing upon the question propounded and as it is not relied upon in argument we shall leave it on one side.

It is not disputed that Rev. Stat. § 5209, if applicable, punishes the bank manager, and those who aided and abetted him in his crime.Coffinv.United States,156 U.S. 432,447. The argument is that Congress has no power to punish offences against the property rights of State banks. It is said that the statute is so broad that it covers such offences when they could not result in any loss to the Federal Reserve Banks, and it is suggested that if upheld the Act will invalidate similar statutes of the States. This argument is well answered byHiattv.United States,4 F.2d 374,377. Certiorari denied.268 U.S. 704. Of course an act may be criminal under the laws of both jurisdictions.United Statesv.Lanza,260 U.S. 377,382. And if a state bank chooses to come into the System created by the United States, the United States may punish acts injurious to the System, although done to a corporation that the State also is entitled to protect. The general proposition is too plain to need more than statement. That there is such a System and that the Reserve Banks are interested in the solvency and financial condition of the members also is too obvious to require a repetition of the careful analysis presented by the Solicitor General. The only suggestion that may deserve a word is that the statute applies indifferentlyPage 259whether there is a loss to the Reserve Banks or not. But every fraud like the one before us weakens the member bank and therefore weakens the System. Moreover, when it is necessary in order to prevent an evil to make the law embrace more than the precise thing to be prevented it may do so. It may punish the forgery and utterance of spurious interstate bills of lading in order to protect the genuine commerce.United Statesv.Ferger,250 U.S. 199. See further,Southern Ry. Co. v.United States,222 U.S. 20,26. That principle is settled. Finally, Congress may employ state corporations with their consent as instrumentalities of the United States,ClallamCountyv.United States,263 U.S. 341, and may make frauds that impair their efficiency crimes.United Statesv.Walter,263 U.S. 15. We answer the question:Yes.