WESTFALL

v.

UNITED STATES

U.S. | 1927-05-16

No. 766

274 U.S. 256 Supreme Court of the United States (1927) Caution

Also reported at: 71 L. Ed. 1036 · 47 S. Ct. 629 · SCDB 1926-121 · 1927 U.S. LEXIS 639

Cited by 138 cases

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Synopsis

Westfall was convicted under federal law of aiding a state bank manager to misapply bank funds through a fraudulent certificate of deposit, and he challenged the constitutionality of the Federal Reserve Act's provision subjecting state member banks and their officers to federal criminal penalties under the Revised Statutes. The Supreme Court upheld the constitutionality of the statute, holding that Congress has authority to punish crimes against state member banks of the Federal Reserve System because when a state bank voluntarily joins the federally created System, the United States may criminalize acts injurious to the System's integrity, even if the conduct also violates state law.

Opinion of the Court

Mr. Justice Holmes

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 tfie 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 this question: “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 arid 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. Coffin v. 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 by Hiatt v. 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 States v. 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 doné 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 indifferently whether 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 States v. 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, Clallam County v. United States, 263 U. S. 341, and may make frauds that impair their efficiency crimes. United States, v. Walter, 263 U. S.

15. We answer the question: Yes.

Cases With Similar Vibessemantic neighbors from the corpus

Citator

Cited By (41 total)

United States v. Darby, 312 U.S. 100 (U.S. 1941)

…ertheless deemed appropriate aids to the accomplishment of some purpose within an admitted power of the national government. See Jacob Ruppert, Inc. v. Caffey, 251 U. S. 264; Everard’s Breweries v. Day, 265 U. S. 545, 560; Westfall v. United States, 274 U. S. 256, 259. As to state power under the Fourteenth Amendment, compare Otis v. Parker, 187 U. S. 606, 609; St. John v. New York, 201 U. S. 633; Purity Extract & Tonic Co. v. Lynch, 226 U. S. 192, 201-202. A familiar like exercise of power is the regulation…
Abbate v. United States, 359 U.S. 187 (U.S. 1959)

…uthority.” 260 U. S., at 382. The Lanza principle has been accepted without question in. Hebert v. Louisiana, 272 U. S. 312, also a Volstead Act case, and in the following cases in this Court arising under other statutes: Westfall v. United States, 274 U. S. 256, 258; Puerto Rico v. The Shell Co., 302 U. S. 253, 264-266; Jerome v. United States, 318 U. S. 101, 105; Screws v. United States, 325 U. S. 91, 108, And see California v. Zook, 336 U. S. 725, 752-753, 758 (dissenting opinion). Similarly, Lanza has b…
Bartkus v. Illinois, 359 U.S. 121 (U.S. 1959)

…7; Crossley v. California, 168 U. S. 640; Sexton v. California, 189 U. S. 319; Matter of Heff, 197 U. S. 488; Grafton v. United States, 206 U. S. 333; Ponzi v. Fessenden, 258 U. S. 254. Hebert v. Louisiana, 272 U. S. 312; Westfall v. United States, 274 U. S. 256; Puerto Rico v. The Shell Co., 302 U. S. 253; Jerome v. United States, 318 U. S. 101; Screws v. United States, 325 U. S. 91. Westfall v. United States, 274 U. S. 256, 258. In a chapter in Handbook on Interstate Crime Control, a book prepared in 19…

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Authorities Cited

Coffin v. United States, 156 U.S. 432 (U.S. 1895)
United States v. Lanza, 260 U.S. 377 (U.S. 1922)
S. Ry. Co. v. United States, 222 U.S. 20 (U.S. 1911)
Clallam Cnty. v. United States & United States Spruce Prod. Corp., 263 U.S. 341 (U.S. 1923)
United States v. Ferger, 250 U.S. 199 (U.S. 1919)
United States v. Walter, 263 U.S. 15 (U.S. 1923)
Hiatt v. United States, 4 F.2d 374 (7th Cir. 1924)

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