Court: Supreme Court of the United States; January 1, 1883; Federal Supreme Court; Federal Appellate Court
In *United States v. Britton*, the Supreme Court addressed a conspiracy charge against directors of an association for allegedly misapplying its funds by procuring the declaration of a dividend without sufficient net profits. The court clarified that a conspiracy indictment must charge the conspiracy itself, independent of any acts intended to effectuate it, and that the statutory requirement for an act to avoid penalties serves merely as a means for withdrawal from the conspiracy. The court examined section 5204 of the Revised Statutes, which prohibits associations from declaring dividends exceeding net profits, emphasizing that there are no common-law offenses against the United States. The prosecution argued that the act of declaring an improper dividend constituted a wilful misapplication of funds, punishable under section 5209, and thus supported the conspiracy charge under section 5440. However, the court rejected this interpretation, concluding that if the act of declaring the dividend did not amount to a criminal misapplication of funds, the indictment failed to allege an offense. Ultimately, the court determined that such a declaration, made by an officer in an official capacity, did not constitute a criminal act under the relevant statutes.
The act in question is characterized as maladministration, which may lead to the forfeiture of the association's charter and personal liability for damages incurred by the association or its shareholders, but does not result in criminal prosecution. This situation is likened to a banking association purchasing its own shares unnecessarily, which was not deemed a criminal misapplication of funds in United States v. Britton. The indictment against the defendants does not allege a criminal act; rather, it suggests they conspired to declare a dividend without net profits, which does not constitute an offense. Consequently, the indictment fails to establish liability under section 5209 for the directors, as the alleged conspiracy pertains to a non-criminal act. The court finds the indictment invalid, making it unnecessary to address additional questions from the circuit court judges. This reasoning applies similarly to the related case, The United States v. James H. Britton and Barton Bates, where the indictment is also deemed defective and not subject to amendment based on the presented facts.
