Burton v. United States
196 U.S. 283 (1905)
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Rule of Law:
When a check is deposited in a bank and the amount is immediately credited to the depositor's account without a special agreement to the contrary, the transaction is a sale of the check to the bank, and payment is deemed to have been received at the location of the deposit for the purpose of establishing criminal jurisdiction.
Facts:
- The Rialto Grain and Securities Company (Rialto Company) was located in St. Louis, Missouri.
- The defendant, a U.S. Senator, performed services for the Rialto Company.
- The Rialto Company mailed several checks, drawn on the Commonwealth Trust Company in St. Louis, to the defendant as compensation for his services.
- The defendant received these checks while he was in Washington, D.C.
- He endorsed the checks and deposited them into his personal account at the Riggs National Bank in Washington, D.C.
- Upon deposit, the Riggs National Bank immediately credited the full face value of the checks to the defendant's account.
- The defendant had the right to immediately draw upon the full amount credited to his account.
- There was no oral or special agreement between the defendant and the Riggs National Bank stipulating that the bank was to act solely as an agent for collection.
Procedural Posture:
- The United States indicted the defendant in the U.S. District Court for the Eastern District of Missouri.
- The sixth, seventh, eighth, and ninth counts of the indictment charged that the defendant illegally received compensation via checks in St. Louis, Missouri.
- At trial, the evidence established that the defendant received and deposited the checks in Washington, D.C.
- The trial court instructed the jury to determine whether the Washington bank acted as the defendant's collection agent or as the purchaser of the checks to decide the jurisdictional question.
- The jury returned a guilty verdict.
- The defendant sought and was granted a writ of error for direct review by the Supreme Court of the United States, raising constitutional questions regarding jurisdiction and senatorial privilege.
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Issue:
For the purpose of establishing criminal jurisdiction, is the offense of illegally receiving compensation by check completed in the district where the check is deposited and credited to the defendant's account, or in the district where the check is ultimately paid by the drawee bank?
Opinions:
Majority - Mr. Justice Peckham
No, the offense is completed in the district where the check is deposited and credited to the defendant's account. In the absence of a special agreement, the legal effect of depositing a check and receiving immediate credit is a sale of the check to the bank. At that moment, title to the check passes to the bank, and the relationship between the depositor and the bank becomes one of creditor and debtor, not principal and agent. Therefore, the defendant received payment in Washington, D.C., when the Riggs National Bank credited his account with the value of the checks. As the payment, which is the gist of the crime, occurred entirely in Washington, D.C., the federal court in Missouri lacked jurisdiction to try the defendant for that offense.
Dissenting - Mr. Justice Harlan
Yes, the offense is completed in the district where the check is ultimately paid. The Riggs National Bank was, in a substantial sense, the defendant's agent for collecting the money from the St. Louis bank. The defendant was not truly compensated until the checks were honored in St. Louis, as he remained liable as an endorser if the checks were not paid. The crime was only consummated when the St. Louis bank paid the check to the defendant's representative (the Riggs Bank), thereby extinguishing the defendant's liability and finalizing the payment. Therefore, the offense occurred in St. Louis, and the federal court in Missouri properly exercised jurisdiction.
Analysis:
This decision solidifies the application of general commercial banking law to determine venue in federal criminal cases involving payment by check. By defining the deposit of a check for immediate credit as a transfer of title, the Court established that the crime of 'receiving payment' occurs where the defendant's bank is located, not the payor's. This holding creates a clear jurisdictional rule that limits prosecutorial discretion in choosing a venue, forcing the government to bring charges in the district where the defendant negotiates the instrument. The case underscores the principle that unless a specific agreement designates a bank as a mere collection agent, the law will treat the deposit as a completed transaction at the moment of credit.
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