Lamoyne v. State

DAVIDSON, Presiding Judge

(dissenting).—This case is before the court on motion for rehearing, it having been affirmed at the recent Dallas term.

Several questions for revision are presented which it is urged the court was in error in affirming. My brethren did not agree to the contention of appellant. I am of the opinion this case should be reversed and the affirmance set aside.

The record shows that appellant bought from J. M. Hoskins, vice president and general manager of Drane & Co., a corporation, a hay-press and lifting-jack for which he agreed to pay $250. This occurred in.Navarro County. Hoskins testified that appellant represented to him that he lived on his own farm near Rice in Navarro County, which consisted of 220 acres of land, one hundred of which was in a hay meadow, on which grew fine hay, in sufficient quantity to pay for the press. He said the hay was matured and ready to cut; that there was no lien upon the hay) that he would execute a mortgage on said hay and the property bought from said company, to wit: hay-press and lifting-jack, and some other property. The trade was agreed upon, the note and mortgage executed, and the hay-press and lifting-jack shipped to appellant at Rice. He says he would not have sold appellant the property if he had doubted his statement; that he was induced by hi's statement and representations and the security given to sell the property to appellant. The press cost $170 and the freight was $30, making a total of $200. To this Drane & Co. added ten per cent, extra for expenses, making $220. The other $30 I suppose was profit. Appellant executed a mortgage upon this property, and a McCormick mower and a rake. The McCormick mower cost $40 wholesale and $50 retail. The rake cost $18 or $19 and sells for $25. This note and mortgage were executed before appellant received the hay-press and lifting-jack, which were shipped to him from Dallas, Texas, by order of Drane & Co. Brooks testified that a hay-press such as described would cost the retail merchant $200 including freight, and was sold for $225 cash and $250 on time. The sale and the execution of the note and mortgage occurred on August 2, 1905.

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Absher testified that on or about October 10th, 1905, he called on appellant for settlement of the note due Drane & Co. Appellant informed Absher ho intended to buy the farm was why he told Mr. Hoskins he owned it. It seems, without going into a further detailed statement in regard to some of the other matters, in a general way, that appellant was the tenant of Mrs. Richmond who had a landlord’s lien on the 220 acres of grass and crops, etc. for her rent that year, which was $200. At the time of the execution of the mortgage and note this had been reduced by payment on the part of appellant $100, thus leaving $100 at that time due his landlord. These matters between Mrs. Richmond and appellant had been reduced to writing in the shape of a mortgage. Absher testifies further that he found out that the hay mentioned in the mortgage which was growing on the land at the time of its execution was also included in Mrs. Richmond’s mortgage, and was also included in another mortgage given to the People’s .¡National Bank at Ennis, Texas. Appellant showed Absher the hay included in the Drane

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Co. mortgage which was in a barn, claiming that he had 5,000 or 6,000 bales, but Absher thought he had only 3,000 bales. During their conversation appellant said to Absher that he owed $100 rent, and had cattle and mules and would mortgage them if he was not satisfied. This witness wrote on the back of note which appellant signed. This witness on cross-examination testified: “We (speaking of Drane

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Co.) sold the hay-press, mower and rake to Phillips & McCorley for $225 some time next summer. We turned LaMoyne’s note over to Phillips

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McCorley and authorized them to give it to LaMoyne if he would deliver them the hay-press, mower and rake. We then sold it to Phillips

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McCorley for $225 on two years time.” This witness further testified that appellant offered to turn the property back, but Mr. Jack, appellant’s attorney, wanted Drane

& Co.

to pay his attorney fee and they refused. Phillips & McCorley went to see Drane & Co. about making a deal for the property. Drane

& Co.

told Phillips & McCorley to take appellant’s note and give it to him and get the property. Drane & Co. then sold to them the property for $225. This witness further testified he went twice to see appellant; once he was away, and the next time was October 10th, date above-mentioned, and that on this occasion appellant told him lie had mortgaged his hay to Drane & Co. He signed the statement on back of note. The note shows it was $250 at 10 per cent, interest, and in the event of a default in payment at maturity, and it is placed in the hands of an attorney for collection, or suit is brought on same, then an additional ten per cent, on the principal and interest shall be added as collection fees. It is further stipulated in the note that if $125 and interest due is paid on this note by maturity, the balance may go until October 1st, 1906. The endorsement on the back of the note mentioned by Absher is as follows: “10-10-1905. Rice, Texas. A. D. LaMoyne have about 3,000 bales hay now in barns and same being mortgaged to The Drane Company.—I owe about $100 rent, and have a bale of cotton

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to pay for it. I will be in on or by the 10-19, ’05, and pay or arrange this matter satisfactory with The Drane Compaq, this 10-10-1905. A. D. LaMoyne, Witness W. H. Absher.” The mortgage given to the bank at Ennis includes the crop of cotton, corn, hay and the rent from the tenant Warren, who was cultivating twenty-five acres of land to be grown by appellant during the year 1905, consisting of fifty acres corn and twenty-five acres of cotton, and all hay of any description grown during the year 1905, on the Eichmond farm in Navarro County, about one half mile west from Eice, Texas, and he makes agreement to gather and put the crop in condition for market, and stipulates the delivery at Ennis, etc. This mortgage also includes three horses, nine head of cattle and was for $316.15 for money and supplies to be advanced, etc. This mortgage was executed on the 13th of March, 1905, filed and registered at nine o’clock a. m., volume 60, page 96, March 14, 1905. The mortgage to Mrs. Eichmond was dated 2nd day of January, 1905, and was filed and registered at ten o’clock on the 24th day of January, 1905, in Navarro County. Drane & Co. were in business in Corsicana, the county seat, where the mortgages were filed and registered. Appellant represented, among other things, as Hoskins testified that he owned this land and the grass on it, and there was no lien on same at the time of the execution of the mortgage to Drane & Co. This seems to be substantially the State’s case, except the further fact that he did not own the 220 acres of land' but that it belonged to Mrs. Eichmond. Appellant testified that he had a conversation with Hoskins in which he stated to him he needed a hay-press and if he could buy one on his terms he would do so, and told Hoskins he would give him a mortgage on all of his hay outfit; that he had a new mower for which he paid $50 and a new rake for which he paid $25; that neither had been used. That he did not tell Hoskins that he owned any land; that Hoskins said to him that he (appellant) ought to add the earnings of his hay-press and he (appellant) offered to'do so. Hoskins then-made the note and mortgage. Appellant sold the hay-press, -mower, rake and lifting-jack to Phillips. Phillips gave him his note and $7.50. The $7.50 was for another rake not included in the mortgage. That he had about 6,000 bales of hay when Absher came to his house October 10th; that thirty bales are counted a ton; that there were about 200 tons of hay which was worth $8 per ton; that Absher wanted him to turn over all the property included in the mortgage and the hay, which he would not do. The hay-press cost $250, and that was what he offered to pay for it; that he gave mortgage to Drane & Co. on hay-press, also on his mower and rake which cost him $75; also mortgage on the earning of his outfit. There was some contradiction in the testimony of Phillips and appellant in regard to the number of bales of hay discussed between them, and about some other matters. He stated further that Phillips and McCorley came to him with a view of purchasing the hay outfit; that he told them he owed Drane & Co. $250 and interest, and if they would settle that indebtedness to Drane & Co. and release him

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and get his note he did not care how they settled, or what they paid Drane & Co. That Phillips & McCorley went off and came back with his note and turned it over to him, which he turned over to his attorney, Mr. Jack. Jack testified that he represented appellant on former trial; had the note he gave Drane & Co. for the hav-prcss; don’t know where it is; it had been mislaid. That he represented appellant before this prosecution in his matter with Drane & Co. That appellant signed bill of sale to Drane & Co. for all mortgaged property and sent to him. The witness tried to get Drane & Co. to pay him his fee and they would not do it and witness would not turn them over the bill of sale. The bill of sale is set out and dated June 6, 1906, signed by appellant. Said he did not settle with Drane & Co., but went with Phillips & McCorley to Drane & Co. and Drane & Co. turned them, over appellant’s note, and witness understood they got the machinery and settled some way with Drane & Co. McCorley testified that when he went to see appellant in regard to buying the hay outfit, appellant told him he had put up 1,750 bales of hay the year before, 1905, same year he bought the press from Drane & Co., and he said he did not give a damn whether witness paid Drane & Co. for the press or not. McCorley said he and Phillips desired to buy the press, mower and rake and appellant replied that he owed Drane & Co. $250, and if witness would settle with Drane & Co., and bring him his note, he did not care how the matter was settled, ór whether witness ever paid him. He said he had bought it on credit and witness could do the same. He testifies farther in regard to taking up appellant’s note from Drane & Co., and getting the hav-press, mower and rake, and paying Drane & Co. $225. Perhaps this is a sufficient statement of the facts.

In order to affirm the judgment in this case and overrule the motion for rehearing, my brethren deemed it necessary and proper to overrule the case of Gaskins v. State, 38 S. W. Rep., 470 ; Perry v. State, 39 Texas Crim. Rep., 495 , and Lively v. State, 74 S. W. Rep., 321 . Perhaps it would be useless to go into a long discussion of the reason why these cases should not be overruled. The propositions upon which my brethren seem to plant their reason for overruling those cases is, that wherever property is acquired by reason of the supposed false pretenses or representations, the criterion of punishment is only fixed by full value of all the property acquired at the time, and where in those cases a contrary view is stated they are erroneous, and by reason of that conclusion it would seem necessary to go further to the basic proposition, that it would make no difference how thoroughly secured the supposed defrauded party was for transferring the title to the property, that if there occurred any misstatement or false representation inducing the transfer, the party would be guilty. I cannot altogether agree with the construction placed upon the articles of the Penal Code with reference to swindling. Article 943 Penal Code is as follows: “Swindling is the acquisition of any personal or movable property, money or instrument of writing conveying or securing

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a valuable right by means of some false or deceitful pretense or device, or fraudulent representation with intent to appropriate the same to the use of the party so acquiring, or of destrojdng or impairing the rights of the party justly entitled to the same.” Article 946 Penal Code reads: “It is not necessary in order to constitute the offense of swindling that any benefit shall accrue to the person guilty of the fraud or deceit, nor that any injury shall result to the person intended to be defrauded, if it is sufficiently apparent that there was a willful design to receive benefit or cause an injury." It has always been held in Texas and recognized by the majority opinion as correct that the fraud in swindling is tantamount to fraud in theft, the difference in result being that in theft the title is not parted with or intended to„ be parted with, whereas in swindling title is supposed to pass. A fraud or false pretext, or fraudulent representation, under theft statutes, only transfer the possession, not the title; whereas in swindling it transfers the title, the possession being merely incidental. Then the statute of swindling only refers to acquiring title to such property by means of fraudulent pretenses or devices, but in any event and in all events the property must be acquired; that is, the title must pass or there is no acquisition. Whenever this point has been reached; that is, the title of the property has passed, then under article 946 supra, it is not necessary to constitute swindling that any benefit shall accrue to the party guilty of the fraud or deceit, or that any injury shall result to the party or parties to be defrauded, but at all events the title to the property must pass, and not only must it pass, but there must be a fraudulent acquisition. A party can only be defrauded out of so much property as was obtained by false pretenses and fraudulently appropriated or intended to be fraudulently appropriated. Of course, if the party is not defrauded out of anything, he has not been swindled, and it would make no difference how many false representations or false pretenses were made or devices had been practiced. The party must be either fraudulently deprived of the value of the property itself or the title must pass to him by means of the fraudulent device or pretense otherwise the party transferring it would not be defrauded. As before stated, if he is not defrauded out of anything, as a matter of course, he is not swindled, and I am of the opinion that the authorities on this question are practically if not unanimously one way. If the party takes a sufficient amount of security to guarantee himself against loss, then he has not been defrauded, and so far as the writer is aware, no court has held that a party would be guilty of swindling whatever may have been his false representations if the party transferring the property to the would-be swindler fully protects himself against loss. See State v. Palmer, 50 Kans., 318 ; State v. Clark, 46 Kans., 65 , and McGee v. State, 97 Ga., 199 . In McGee v. State, supra, Atkinson, J. speaking for the court, says: “Where a debtor executed to two creditors separate mortgages to secure debts due to them respectively, and it appeared that, in procuring the credit to secure which the last mortgage was executed, he represented to the mortgagee that the property mortgaged was'

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unincumbered, such misrepresentation cannot be made the basis of a prosecution for cheating and swindling under section 4587 of the Code, unless it be shown that in consequence thereof, the second mortgagee has been in fact defrauded, and that in extending the credit upon the faith of such misrepresentation he has sustained a loss. In such a base, the burden is upon the State, not only to establish the misrepresentation made and credit given, but likewise a loss; and where the evidence shows that the mortgaged property has neither been sold, nor appropriated to the extinguishment of the senior mortgage, there is no such evidence of a loss by the junior mortgagee as will sustain a conviction of the debtor; especially is this true, where the evidence shows that the mortgaged property exceeds in value the aggregate indebtedness represented in both the mortgages, and it does not appear that the senior mortgage is being cither claimed against the mortgagor, or enforced against the mortgaged property.” It might be well enough to state here a fact which has been previously overlooked, that Mrs. Richmond’s debt had been paid one half before the execution of the note, and it was all paid, as I understand this record, about the time of the maturity of Drane & Co.’s debt, but at the time of the maturity of Drane & Co.’s note the debt at the bank at Ennis had not been paid, but the inference from the record is that before Drane & Co. took the property both debts had been paid, and whatever obligation appellant was due by reason of the senior mortgage had been extinguished. In the case of State v. Palmer, supra, it was contended by appellant that McClelland in the case was not defrauded. He seems to have been the mortgagee or at least the party alleged to have been injured. Mc-Clelland claimed he was agent of defendant for the time during which he let her have money, and that the arrangement between them. was that he let her have certain amounts of money to put into her business, buying and selling silkworm eggs, and which he was to receive back out of the first sales with a share of the profits, and in the meantime he was to be secured with certain notes which he was to hold as collateral security for all money advanced or loaned, and he stated he would not have let her have the money without the notes as security. He let her have in all, less than $1,300 that he did not get back, and the evidence shows that he received from her, as security, a note for $700, one for $1,500, and one for $3,000. There is some evidence to show' that the $3,000 note was worthless. There was never any attempt on the part of McClelland or any one for him, to collect said note. It is said if the two notes were good and collectible, McClelland had at least $2,200 in security for less than $1,300 that he let the defendant have and did not get back, and the court said, “With such a state of things, we do not see how he was defrauded. It may be said that he would not have let the defendant have the $200 August 28, 1891, without the $3,000 note as additional security." That may be true; but if true, and if the $3,000 note is worthless, yet if the collateral already in his possession was sufficient to save him from loss on the $200, he

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was not defrauded; and if not defrauded, the defendant could not be guilty of a crime in connection therewith. The mere obtaining of money under false pretenses does not alone constitute a crime. The money must be obtained to the injury of some one. Though money is obtained by misrepresentation, if no injury follows, no crime is accomplished. In this case, the defendant was undoubtedly guilty of many flagrant misrepresentations and other dishonest acts; but if all such representations and dishonest acts did not actually result in injury to Mc-Clelland, she cannot be convicted in this State simply because upon the face of things she is bad. A person must be charged with and convicted of some specific offense, if convicted at all. It will not do to convict on general principle, because the evidence shows the defendant devoid of common honesty,” and this opinion was rounded up with this expression: “We think the record wholly fails to show that McClelland was defrauded out of anything by the defendant.” In the case of State v. Clark, supra, after stating the facts, the allegation was that appellant obtained $5,600 from the Stock Yards Bank at Kansas City by falsely representing to the agent of the bank that he was the owner of 143 head of cattle, and had good right to mortgage same. The evidence for the State disclosed the fact that the defendant was indebted to the firm of Irwin, Allen & Co., of Kansas City, in the sum of $3,100 at the time the money was charged to have been obtained. To procure the loan of $5,600 the defendant gave a chattel mortgage upon the 143 head of steers, and some other stock, and also furnished as indorsers upon the note which ,he executed, Irwin, Allen & Co., and W. H. Conklin. Out of the loan thus procured the defendant paid Irwin, Allen & Co. the amount due them, and received from the bank three cashier’s checks for the balance of the $5,600. Some six weeks after the mortgage was given, it was discovered that the defendant did not have all the cattle he had included in the mortgage, and the bank took possession of the stock described in the mortgage which could be found and sold the same, realizing therefrom the sum of $3,969, leaving the balance of $1,831 upon the note given for the debt and interest. The evidence upon the part of the State and the defense showed that the indorsers upon the note were good, and the balance could have been collected if suit had been instituted, but no effort was made before the filing of the information in this case to collect the amount due, except, some conferences over the matter and personal requests to pay the balance due. It seems to have been conceded that Irwin, Allen & Co., and W. H. Conklin were financially responsible. The court then asked this question: “Can it be said under this state of facts, that an offense, under the statute, for obtaining money or property from the bank by false pretenses has been made out?” The court then sets out the elements of the offense of swindling and says they must concur in whole or in part to induce the owner to part with his property when the false pretenses are resorted to, 'and cites quite a number of authorities. Copying further from this opinion: “Tested by the above rules, which seem-to be supported by reason and authority, it must appear that some one

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has been defrauded to insure a conviction. This one element is essential. Can it be said that the Stock Yards Bank has actually been defrauded by the defendant, when it holds a note upon which there is a balance of less than $2,000 and the indorsers thereon are solvent, and no steps are taken to enforce the collection ? The language of the court, in the case of People v. Wakeley, supra, is: ‘But it does not amount, in law, to a false pretense unless made with a fraudulent intent, and the person parting with the property is actually defrauded/ Was the Stock Yards Bank actually defrauded ? What right was it deprived of in the business transaction ? It had parted with no money, but it held a note which was conceded to be good, aside from the security given by the defendant, and we fail to see in what way it was injured. If it was not defrauded, this essential ingredient of the crime charged was lacking, and, unless evidence can be produced to show that the bank was actually defrauded, the defendant should be discharged.” If there is any false pretense in this case, as I understand the record, claimed by the State as testified to by Hoskins, it is found .in the fact that defendant said to him that he had some matured uncut grass or hay on which there was no lien. There was no attempt to obtain a lien on the land. There could be no false pretenses in the promise to pay the earnings of future work that might be obtained in money for working the hay outfit. So we are narrowed down, as I understand the case, to the representation or pretense of the one isolated fact that is, that the appellant said to Hoskins that he had 100 acres of land on which was matured but uncut hay with no lien on it. Appellant denies the statement of Hoskins. Appellant, as a matter of fact, under the rental contract with Mrs. Richmond owned the hay during that contract; he had paid $200 rent or agreed to do so, having paid $100 of it for the 220 acres, part of it to be used as a farm, and the other for growing hay. It was his property as far as it could be transferred by the rental contract. So this is a very small matter about the ownership at this point. If that hay had been baled and stolen the ownership would have been very clearly in appellant, and the ownership -would also have been in appellant if somebody had obtained that hay by false pretenses. Then the only false representation occurs to the writer is the one involved in the statement that there was no prior lien on the uncut hay, and whether or not it was a fraudulent representation such as contemplated by the statute, was it one that would have ordinarily or legally have misled Hoskins. The writer is under the impression that it was not. A false pretense, token or writing, to be criminal, must, it has been held, be of a nature to deceive, and such as the victim under the circumstances may rely upon. The cases maintain that a false pretense is not criminal unless calculated to deceive persons of ordinary prudence and discretion. Com. v. Grady,

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Bush., 285; People v. William, 4 Hill., 90. And it has been decided that where a defendant falsely and fraudulently represented that he owned property free from incumbrance, when in fact there-was a recorded mortgage against it, and by such representation obtained money from one who was ignorant of the mort

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gage, the defendant was not guilty of obtaining the money by false pretenses, if the party from whom it was obtained had the means of detection at hand. Com. v. Grady, supra. The authorities, however, are divided upon this proposition. But as said in Com. v. Grady, supra, the alleged defrauded party could have satisfied himself so easily by just stepping into the clerk’s office and ascertaining whether there was a mortgage of record or not. In the case in hand these representations testified to had been made to Hoskins, it seems, from the record, in the town of Corsicana, county seat of Havarro County. The county clerk’s office shows both mortgages were filed and registered, one early in January, and the other in March. These mortgages were filed and registered in that office long prior to August second when this mortgage to Drane & Co. was executed. The slightest degree of caution or discretion or prudence would have settled the fact to Drane & Co. that these two mortgages were of record, and to show that they were not altogether misled or imposed upon, the mortgage executed to them by appellant provides that if his representations should prove untrue, they were authorized to take charge of the mortgaged property for their protection.

The writer is of the opinion that the representations here are not of such a fraudulent character as to bring it within the statute; and the evidence shows—all through the record shows that this is a civil, not a criminal transaction—Appellant at once, when they desired it, turned over to them everything in payment. He restored to them their property which is very strong evidence that there was no intent to defraud at any time. All of these matters grow out of and relate back to the original contract and what occurred between the parties at the time of the trade; and under Absher’s testimony it seems when he went to collect the debt there were several thousand bales of hay. He was representing Drane & Co. in a settlement or attempted settlement with appellant.

So, as I understand this record, there was no attempt in any way to defraud Drane & Co. out of their property or money. They let the matter go along until the following summer, and then cancelled the debt by taking back the machinery and selling it to Phillips & McCorley. There is nothing to indicate from this testimony, as I understand it, that if Absher had desired to get a fair settlement it would not have been accomplished. The matter is left in that position with several thousand bales of hay on hand; with the machinery under mortgage on hand, and supplemented by the endorsement placed on the note as evidenced by appellant’s signature, which is in the following language: “10-10-1905. Rice, Texas. A. D. LaMoyne have about 3,000 bales hay now in barns and same being mortgaged to The Drane Company—I owe about $100 rent, and have a bale of cotton to pay for it. I will be in on or by the 10-19-’05 and pay or arrange this matter satisfactory with The Drane Company, this 10-10-1905. A. D. LaMoyne; witness W. H. Absher.” This whole case has the appearance to the writer, taking in all its bearings, of being a civil case instead of a criminal prosecution.

How, with reference to the other question, that is, ample, security to

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protect the debt relieves of swindling. Concede appellant informed Hos-kins that there was no prior lien on the hay, and that it was a false statement. Then, we have Drane & Co. selling to appellant machinery that cost $200 laid down at Rice. They charged him up with 10 per cent, extra charges for something which is not stipulated, and $30 additional, making a total of $250. The machine is said to have been worth, under the testimony of Brooks, and Hoskins, $225 in cash, or on time $250. For the securing of these debts they took a mortgage on the machine, which they sold for $250, and which is supposed to be worth that amount as it sold for that amount, and in addition .to secure themselves safely, took a mortgage on the other two pieces of machinery, amounting to $15, making their security $325 for the debt of $250. Evidently on the tenth of October, at the time Absher saw appellant out at his place, there was about 3,000 bales of hay which they testified was worth 25 cents or 30 Cents a bale. He owed the rent or balance at that time it seems of $100. The hay was still further bound to some extent and doubtless for the indebtedness to the bank at Ennis secured by mortgage on three horses, nine head of cattle, and crops and things of that sort which were mortgaged to the bank. Now, it would seem from this statement that Drane & Co. was amply secured for tlieir $250 at the time of the execution of the mortgage. Then, as before stated, as I understand the authorities everywhere to hold, if the mortgagee takes sufficient property to protect himself, false representations do not bring the case within swindling. Drane & Co. had taken ample security to protect themselves, and I need go no further to warrant this statement than the face of the mortgage. This could be supplemented with the testimony of Hoskins and Absher. Now, it these propositions are true, then it occurs to me if appellant is not guilty of swindling, it would make no difference how many false representations he made. Then I take it, as a further proposition, that a party is not swindled out of anything except what he loses by virtue of false representations, and if the security is ample to protect against loss, the false representations do not come within the statute. It would therefore follow as a correct proposition that Drane & Co. could be swindled out of only what they in fact lost, if they lost anything. The authorities cited, it seems to me, support that proposition, and my brethren in overruling the Gaskins, Perry, and Lively cases, supra, are in error. I am not discussing the question where parties who give mortgages sell the mortgaged property to evade paying the debt, for we have another statute which punishes a party who sells mortgaged property. That question is not in the case.

As this case presents itself to my mind, and under the authorities, the State has no case, for Drane & Co. whatever else may be said about this case, amply secured themselves with property $15 in advance of the value of their debt of $250, and amply secured themselves at the time of the execution of the note for price of machinery sold appellant.

For the reasons above 1 respectfully enter my dissent from the affirmance.