People v. Ashley

SCHAUER, J., Concurring and Dissenting.

I concur in the judgment solely on the ground that the evidence establishes, with ample corroboration, the making by the defendant of false representations as to existing facts. On that evidence the convictions should be sustained pursuant to long accepted theories of law.

It is unnecessary on the record to make of this rather simple case a vehicle for the revolutionary holding, contrary to the weight of authority in this state and elsewhere, that a promise to pay or perform at a future date, if unfulfilled, can become the basis for a criminal prosecution on the theory that it was a promise made without a present intention to perform it and that, therefore, whatever of value was received for the promise was property procured by a false representation. Accordingly, I dissent from all that portion of the opinion which discusses and pronounces upon the theories which in my view are extraneous to the proper disposition of any issue actually before us.

The majority opinion strikes down a rule of law, relating to the character and competence of proof of crime, which *275 has been almost universally respected for 200 years—and the reasoning which has been advanced for the innovation is that creditors, grand jurors, and prosecutors must not be expected to institute any criminal charges against innocent people, and that even if they do the intelligence of trial jurors and the wisdom of appellate judges can be depended upon to right the wrong, hence the time honored rule may be scrapped. The unreality of this reasoning and the wisdom of the old rule become obvious on reflection.

In a prosecution for obtaining property by the making of a false promise, knowingly and with intent to deceive, the matter to be proved, as to its criminality, is purely subjective. It is not, like the specific intent in such a crime as burglary, a mere element of the crime; it is, in any significant sense, all of the crime. The proof will necessarily be of objective acts, entirely legal in themselves, from which inferences as to the ultimate illegal subjective fact will be drawn. But, whereas in burglary the proof of the subjective element is normally as strong and reliable as the proof of any objective element, in this type of activity the proof of such vital element can almost never be reliable; it must inevitably (in the absence of confession or something tantamount thereto) depend on inferences drawn by creditors, prosecutors, jurors, and judges from facts and circumstances which by reason of their nature cannot possibly exclude innocence with any certainty, and which can point to guilt only when construed and interpreted by the creditor, prosecutor or trier of fact adversely to the person charged. Such inferences as proof of the alleged crime have long been recognized as so unreliable that they have been excluded from the category of acceptable proof.

As a basis for overturning the rule that proof of the mere making of a promise to perform in the future and of subsequent failure to perform is not proof of a false pretense, the majority opinion first purportedly adheres to the rule by stating that “proof of nonperformance alone [is not] sufficient in criminal prosecutions based on false promises,” then argues that “Any danger, through the instigation of criminal proceedings by disgruntled creditors, to those who have blamelessly encountered ‘commercial defaults’ must, therefore, be predicated upon the idea that trial juries are incapable of weighing the evidence and understanding the instruction that they must be convinced of the defendant’s fraudulent intent beyond a reasonable doubt, or that appel *276 late courts will be derelict in discharging their duty to ascertain that there is sufficient evidence to support a conviction. ’ ’ This doctrine, if universally applied, would eliminate all rules governing the quality and sufficiency of proof. The credence to be placed in the testimony of accomplices, or other complaining witnesses, would be left entirely to the sagacity of jurors and the presumed omniscience of appellate judges. I am unwilling to accept as a premise the scholastic redaction of the majority that rules of proof may be set aside because appellate judges will always know when a jury has been misled and the proof is not sufficient. The most important function which courts have to perform in respect to criminal law is not to make easier the conviction of alleged miscreants ; it is the protection of the innocent against false conviction. The highest duty which this court has to perform in the cause of justice is to protect the individual person against the power of the state; the most grievous injury it can do to the people is to assist in building a superstate by countenancing encroachments on the rights of individuals and whittling away at the rules which protect them.

The suggestion in the majority opinion that it is inconceivable “that trial juries are incapable of weighing the evidence [impliedly, with omniscient accuracy however inconclusive it be] and understanding the instruction that they must be convinced of the defendant’s fraudulent intent beyond a reasonable doubt, or that appellate courts will be derelict [less' than omniscient] in discharging their duty” affords no substantial basis for striking down a rule of proof. The opinion naively continues: “If . . . misrepresentations are made innocently or inadvertently, they can no more form the basis for a prosecution for obtaining property by false pretenses than can an innocent breach of contract”!

The tragic part of the above quoted philosophy is that the very declaration of it as a rule of law makes it false in fact. It becomes false in fact because when published as a rule of law it cuts the heart out of a pertinent safeguard which the accumulated wisdom of at least two centuries has found to be necessary to prevent the conviction of the innocent who have met with commercial misfortune.

With the rule that the majority opinion now enunciates, no man, no matter how innocent his intention, can sign a promise to pay in the future, or to perform an act at a future date, without subjecting himself to the risk that at some later date others, in the light of differing perspectives, *277 philosophies and subsequent events, may conclude that, after' all, the accused should have known that at the future date he could not perform as he promised and if he—as a “reasonable” man from the point of view of the creditor, district attorney and a grand or trial jury—should have known, then, it may be inferred, he did know. And if it can be inferred that he knew, then this court and other appellate courts will be bound to affirm a conviction.

A trial by jury, under circumstances easily to be foreseen, would offer but hazardous protection in such a case. I have faith—great faith—in our jury system as now constituted. But I have developed that faith through seeing it operate under wise and time-tested regulations and limitations as to the essential characteristics of proof which do not unrealistically assume that any human—whether a district attorney or a grand juror or a trial juror or a judge or justice of a court-—-is beyond error.

The far reaching and revolutionary ruling of the majority opinion made under the circumstances shown, indicates to me not so much a desire to enforce law as a fervor to declare new law; the criticized ruling is not necessary to an affirmance in this case. Defendant here did more than merely make a promise, with or without a present intention to perform, to pay his victims in the future and fail to perform that promise. There is evidence from which it could be found that Mrs. Russ was induced to deliver property to defendant throúgh reliance in a material degree on his knowingly false representations that he owned the La Brea property, on which he would give her a first mortgage, 1 whereas the property *278 was in fact owned by Dr. Phillips, who had leased it to an officer and stockholder of Life’s Estate and had not authorized its encumbrance. There is evidence from which it could be found that a material element in the inducement of Mrs. Neal to deliver property to defendant was his knowingly false representation that she would have good security for her loan because Life’s Estate was worth half a million dollars, 2 whereas it was in fact in financial difficulty. These false representations as to existing matters of fact would support the conviction. It has been consistently held in this state that even though there is but one misrepresentation, there are separate offenses of theft through false pretenses if property is obtained on separate occasions, because the crime is not complete until defendant obtains possession of the property. 3

*279

Evidence Constituting Corroboration

The requirement of section 1110 of the Penal Code that the false pretenses, if proved by the testimony of only one witness, be corroborated is met by evidence of similar pretenses made to another. (People v. Whiteside (1922), 58 Cal.App. 33, 41 [ 208 P. 132 ] ; People v. Munson (1931), 115 Cal.App. 694, 697 [ 2 P.2d 227 ] ; People v. McCabe (1943), 60 Cal.App.2d 492, 497 [ 141 P.2d 54 ].)

Here the representations of existing facts made to each of the victims, Mrs. Russ and Mrs. Neal, were similar; they were misrepresentations as to the existing ownership of property by defendant or Life’s Estate which would constitute security for any loan they might make. The similarity of defendant’s scheme in each case is shown also by the representations as to the use to which any loan would be put. Even though the representations as to things to be done in the future are not sufficient in themselves to support a conviction, they constitute a part of the fraudulent scheme and their similarities furnish additional corroboration. The employe of the bank who arranged for the cashing of Mrs. Neal’s bonds testified that when defendant and Mrs. Neal came to the bank they stated that the proceeds of the bonds were to *280 be used in a real estate transaction involving a theatre. Also one Farnsworth, an employe of Life’s Estate who was not a victim, testified that defendant told him that defendant owned the Sunset property.

Generally corroborative is the following evidence: Farnsworth testified that after Mrs. Russ had delivered her property to defendant she asked him for repayment at a time sooner than defendant was willing to agree to; that defendant, as well as Mrs. Russ, appeared to be excited; and that defendant said, “it will ruin me, and how am I going to raise the money.” An investigator for the district attorney testified that he went to defendant’s home and the offices of Life’s Estate on April 17, 1950, and told defendant’s wife and officers and employes of Life’s Estate that he had a warrant for defendant’s arrest; that on this occasion and on two other occasions when the investigator returned they did not disclose defendant’s whereabouts; that after defendant was finally apprehended in Long Beach in August, 1950, he said that he had gone east in an attempt to raise funds, that he had known for some time that a warrant for his arrest had been issued, and that he had not yet surrendered because he wished to straighten out his affairs. Mrs. Shepard, a woman not shown to be a victim, testified that on April 15, 1950, she had a telephone conversation in which defendant told her that he was going out of the city for a few days to raise some money, that he would arrange that her money be returned, and that “I can’t talk any longer ... I am being watched.”

The testimonies of Mrs. Russ and Mrs. Neal as to the circumstances under which they turned over their properties to defendant and as to subsequent circumstances are in some respects confused, but the jury may well have concluded that this confusion, rather than casting doubt on the essential portions of their testimonies as to the false representations, indicated an aspect of their characters which made defendant select them as victims.

On the subject of the nature of the representation necessary to constitute the crime (whether a “false promise” is a misrepresentation of past or existing fact), the jury were instructed as follows:

“To constitute the crime of theft by obtaining money by false pretense, the false pretense used must be a fraudulent representation of an existing or past fact . . .

*281 “A mere expression of opinion or a statement concerning the future is not such a fraudulent representation . . .

“You are instructed that if you find that the statements made by the defendant were true when made, that a subsequent change in conditions, which made it impossible to carry out the statements as made would not make them a false representation . . .

“[A] promise is the expression of the present intent and is a fact. Therefore if a promise is unconditionally made and is made without intention of performance, it is a fraud. The secret intention of a contracting party not to perform a promised act which induces contractees to execute their agreement is an essential feature of his representation. Whether a promise made to effect a transaction by subverting the will and judgment of a promisee, was dishonest, is a matter for the jury to determine from all of the evidence in the case.”

The last quoted instruction is in accord with certain dicta in People v. Gordon (1945), 71 Cal.App.2d 606, 624 [ 163 P.2d 110 ] [actually the false pretense upon which the conviction depended was not a mere promise; it was a misrepresentation as to the character and value of land and the stage of its development for oil production 4 ], and People v. Mason (1948), 86 Cal.App.2d 445, 449 [ 195 P.2d 60 ] [here, likewise, the false pretense depended not on a mere promise; it was a misrepresentation as to existing facts pertinent to the value of oil stock, the drilling project of the company, its financial status, and the purpose of the defendant in letting the victim “get in because she was a friend of Enders”], cited by this court in People v. Jones (1950), 36 Cal.2d 373, 377 [ 224 P.2d 353 ], for the proposition (also interjected by way of dictum and entirely unnecessary to the decision) that “a promise, if unconditional and made without present intention of performance, will constitute actionable fraud.” In the Jones case the actual misrepresentations are stated by the court as follows: “It appears from the testimony . . . that *282 defendant induced their [the complaining witnesses’] advancements of money upon the following representations: That the business was ‘a gold mine,’ was ‘making nothing but money,’ and ‘there wasn’t a chance of losing’; that the equipment of the firm ‘was all paid for’; and that more money was needed to secure new equipment.” All of such representations obviously related to alleged existing facts, and were false. There are similar wholly unnecessary expressions in People v. Ames (1943), 61 Cal.App.2d 522, 531-532 [ 143 P.2d 92 ] [the actual holding was that ‘‘Because a false statement of a present fact is coupled with a false promise of a future act, it does not overcome the effect of the false pretense concerning the present fact”], and People v. Chamberlain (1950), 96 Cal.App.2d 178, 182 [ 214 P.2d 600 ] [a positive statement as to ownership of a horse]. All the cases cited in this connection are, of course, out of line with the traditional view that proof of a false promise does not establish the crime. They do not attempt to explain or disapprove, but simply ignore, those many other California cases which hold in considered opinions that a false promise is not a false pretense upon which a conviction of theft can be based.

The Weight of Authority

The traditional view that the representation must be of a present or past fact, and that a mere promise to perform an act in the future will not support a conviction, is expressed in the following cases: People v. Wasservogle (1888), 77 Cal. 173, 174 [ 19 P. 270 ] ; People v. Green (1913), 22 Cal.App. 45, 48, 51 [ 133 P. 334 ] [conviction reversed because defendant’s statements which induced victim to part with property were promises, not misrepresentations of fact]; People v. Kahler (1915), 26 Cal.App. 449, 452 [ 147 P. 228 ] [same] ; In re James (1920), 47 Cal.App. 205, 206 [ 190 P. 466 ]; People v. Mace (1925), 71 Cal.App. 10, 21 [ 234 P. 841 ]; People v. Walker (1926), 76 Cal.App. 192, 205 [ 244 P. 94 ] ; People v. Moore (1927), 82 Cal.App. 739, 746 [ 256 P. 266 ] ; People v. White (1927), 85 Cal.App. 241, 250 [ 259 P. 76 ] ; People v. Cale (1930), 106 Cal.App.Supp. 777, 780 [ 288 P. 430 ] [conviction reversed because representations were in form of promises] ; People v. Robinson (1930), 107 Cal. App. 211, 221 [ 290 P. 470 ] ; People v. Reese (1934), 136 Cal. App. 657, 663 [ 29 P.2d 450 ] [conviction reversed because representations were as to future use to be made of money] ; People v. Downing (1936), 14 Cal.App.2d 392, 395 [ 58 P.2d 657 ] ; *283 People v. Jackson (1937), 24 Cal.App.2d 182, 204 [ 74 P.2d 1085 ] [conviction reversed because representations related only to the future] ; People v. Daniels (1938), 25 Cal.App.2d 64, 71 [ 76 P.2d 556 ] ; see, also, People v. Cravens (1947), 79 Cal.App.2d 658, 664 [ 180 P.2d 453 ] [conceding that representation must be of present or past fact; unnecessary to rely on theory that making a promise without intent to perform is a false representation of a present fact, the promisor’s state of mind].

According to an annotation in 168 American Law Reports 833, 835, “The rule is well established in most jurisdictions that the criminal offense of obtaining money or other valuable thing by false pretense is not predicable upon the present intention of the defendant not to comply with his promises or statements as to his future acts.” The annotation also collects the comparatively few cases which take the view that a false promise is a misrepresentation as to the present fact of the promisor’s state of mind.

Although I would follow the traditional rule supported by the great weight of authority both in California and elsewhere, rather than that innovated or suggested by way of dicta in the mentioned eases, I do not believe that here the giving of the instruction to the effect that a promise may be a false pretense requires a reversal. The representations of defendant as to existing facts and as to future matters were inextricably interwoven; it may confidently be inferred that the jury believed that all such representations were made; the conviction can be upheld on the basis of the factual misrepresentations and the promissory statements can be considered simply as corroborative; they are in truth but a part of the res gestae. On no reasonable view of the evidence, and the instructions read together, can it be said that =there has been a miscarriage of justice.

I think that the judgment should be affirmed but that the highly controversial discussion which is unnecessary to the decision and is aimed at establishing a new rule in California, contrary to the weight of authority here and generally elsewhere, should be eliminated.

Carter, J., concurred.

Appellant’s petition for a rehearing was denied March 17, 1954. Carter, J., and Schauer, J., were of the opinion that the petition should be granted.

Defendant was accused in two separate counts of feloniously taking $3,000 in money from Mrs. Russ on or about November 19, 1948, and of feloniously taking $4,200 in money from her on or about December 4, 1948.

The People’s evidence as to these counts shows the following: On November 18, 1948, defendant told Mrs. Russ that he owned the Sunset and the La Brea property, asked her if she had any cash, and when she replied that she had 63,000 stated that he would give her a first mortgage on the La Brea property if she would lend him the money. Later on the 18tli defendant asked Mrs. Russ if she had any real or personal property and she told him that she had a first trust deed and a chattel mortgage.

On November 19 defendant drove Mrs. Russ to the bank and, induced by and in reliance on the misrepresentations, she delivered $3,000 in cash to him.

Defendant thereafter repeated his misrepresentations as to the La Brea property and his inquiries as to whether Mrs. Russ owned any other property, and stated that in exchange for the first trust deed she could have a first mortgage on the La Brea property. Either “four or five *278 days” after the cash transaction, or on November 20, defendant again drove Mrs. Buss to the bank and she obtained and turned over to him the trust deed and chattel mortgage. Defendant told her he would "cash” these evidences of indebtedness.

Shortly thereafter Mrs. Buss sold her trailer for $1,580 and turned this sum over to defendant, again in reliance on his representations as to the La Brea property.

About January 15, 1949, defendant sold the trust deed to a broker for $3,000.

Defendant was accused in two separate counts of feloniously taking from Mrs. Neal $13,590 on or about June 19, 1948, and $4,470 on or about August 3, 1948.

The People’s evidence as to these counts shows the following: In March, 1948, defendant met Mrs. Neal and asked her whether she had any property. She told him that she had $17,500 in "war bonds.” He learned by further questioning that the bonds were in North Carolina, discussed with her the making of a loan, and induced her to have the bonds sent to her.

After Mrs. Neal obtained possession of the bonds she inquired as to security and defendant replied that the security would be "good,” that Life’s Estate was worth half a million dollars, that there was $125,000 worth of equipment in the La Brea building alone, and "a lot of other property.” On June 19, 1948, the day after defendant made the last mentioned representations, he drove Mrs. Neal to a bank where she cashed $13,590 of the bonds and endorsed and delivered to defendant the check for that amount which she received from the bank.

At defendant’s instructions the remaining bonds, which could not be cashed directly by a bank, were mailed for cashing with directions that the check therefor be mailed to defendant. Defendant thereafter received a check dated August 2, payable to Mrs. Neal for $4,470. She endorsed this cheek on August 3 and defendant cashed it on August 4.

The situation here is substantially similar to that in People v. Rabe (1927), 202 Cal. 409, 417 [ 261 P. 303 ], relied on by the majority. There defendant was charged in three counts with obtaining from one person by false pretenses $1,250 on August 2, $4,000 on August 5, and a deed to real property of the value of $11,000 on August 15. Each sum was in payment for stock in a corporation which defendant said would be, but which, was not, thereafter incorporated. The false representations *279 were that certain assets had been acquired for and certain persons had agreed to act as officers of the proposed company. Defendant contended that one crime had been split into three parts. It was held, “ [p. 413] Where the proof in a given case is sufficient to show the existence of a fraudulent intent or purpose on the part of an accused to obtain property from another by false or fraudulent representations, the making of the first false representations which moved or induced the person to whom they were made to part with his property does not immune the defrauding person from punishment for subsequently obtaining from said person other property which was parted with under the influence of the fraudulent representations which were still operating upon the mind of the defrauded person at the time he passed his property into the hands of said designing person. . . . [p. 414] [T]he crime is accomplished when an accused receives into his possession property which he had planned to fraudulently gain. So in the instant ease, while a general intent to defraud may have been formed in the mind of the accused at the time of or before he completed the first offense, the other crimes charged were completed as separate and distinct offenses on the days that he unlawfully took possession of the property described in the several counts of the indictment. ’’

The theory in false pretenses eases is somewhat similar to that in embezzlement cases where each act of fraudulent appropriation of a portion of property with which defendant is entrusted is a separate crime (People v. Stanford (1940), 16 Cal.2d 247, 251 [ 105 P.2d 969 ]) rather than that in larceny eases where the taking of property on different occasions and even from different owners pursuant to a general plan is treated as a single offense (People v. Dillon (1934), 1 Cal.App.2d 224, 229 [ 36 P.2d 416 ]).

The true ground of the holding of the District Court of Appeal and the peculiar sense in which it used the word "promises” is evident from the following expression (p. 624 of 71 Cal.App.2d) : "The ‘assurances’ and ‘guarantees’ of immediate profitable sales or leases for the vendees were of the nature of promises. If a promise is unconditional and is made without intention of performance it is actionable fraud . . . If the jury determined that defendants knew or had good reason to believe that the acres they were selling were outside of the productive limits of an oil field or that they had no belief that the land sold was underlain with oil in commercial quantities . . . then they were warranted in finding that defendants had committed theft by false pretense.”