Title: Carter v. State
Citation: 386 So. 2d 1102
Docket Number: 51991
State: Mississippi
Issuer: Mississippi Supreme Court
Date: August 13, 1980

386 So. 2d 1102 (1980) Charles A. CARTER v. STATE of Mississippi. No. 51991. Supreme Court of Mississippi. August 13, 1980. *1103 John R. Poole, William Goodman, Jackson, for appellant. Bill Allain, Atty. Gen., by Susan L. Runnels, Sp. Asst. Atty. Gen., Jackson, for appellee. Before ROBERTSON, P.J., and WALKER and BOWLING, JJ. BOWLING, Justice, for the Court: Appellant, Charles A. Carter, appeals from his conviction of false pretense in the Circuit Court of the First Judicial District of Hinds County. The indictment was issued on July 7, 1978, charging appellant with the false pretense that allegedly occurred in June, 1972. The indictment was prepared and rendered under Mississippi Code Annotated section 97-19-39 (1972), which reads as follows: Appellant assigns several alleged errors resulting in his conviction. We need only to consider whether or not the evidence presented by the State was sufficient to come within the provisions of the above statute. We find that the State clearly and without any doubt failed to present a case under the charge in the indictment, and it follows that the cause should be reversed and appellant discharged. At the outset, and as hereinafter discussed, we point out that in the entire transaction in question Bankers Trust Savings &amp; Loan Association lost nothing, but conversely, it gained. The appellant gained nothing. At all times during the period in question appellant was chairman of the board of Bankers Trust Company, the parent corporation of Bankers Trust Savings &amp; Loan Association, of Jackson, Mississippi. He was an attorney and a certified public accountant. In addition to being the head of a law firm, he had other business interests. The entire matter began when appellant entered into a business transaction with one D.C. Taylor of Greenville, Texas. This relationship started in the first part of 1971. Taylor owned a motel in Greenville and other Texas property. The motel was in serious financial difficulty. Appellant, having previously known Taylor, and at Taylor's request, agreed to personally assist Taylor in his financial trouble in Texas. Neither Bankers Trust nor the Savings &amp; Loan Association had any involvement whatever in that transaction. In fact, neither company was qualified legally to do any business in the State of Texas. Appellant loaned Taylor a considerable amount of his admittedly personal funds. The motel was saved because of appellant's assistance to his acquaintance, Taylor. In addition to financial assistance, appellant assisted in accounting and operating procedures involving the motel. Good business practice dictated that appellant secure his personal investment in the Texas property. Therefore, he requested and received security instruments to protect his loan to Taylor. It so happened that at the time Taylor owned some mostly undeveloped property near Columbus, Mississippi, known as Eastwood Hills Subdivision. In securing his personal involvement with Taylor and the saving of *1104 his property in Texas, the security agreements included a second deed of trust on the Eastwood Hills Subdivision property. It is clear from the record that this was only incidental to the main business transactions in Texas. The second deed of trust on the Mississippi property was not recorded and appellant at no time has attempted to gain by that instrument. In June, 1972, Taylor applied for a loan on the Eastwood Hills Subdivision property. Undisputedly, the sole purpose for the loan was to complete the paving of the subdivision streets. Taylor had a prior loan with Bankers Trust Savings &amp; Loan Association for development of the subdivision, and in June, 1972, he owed the Savings &amp; Loan Association a balance on that loan of $67,082.60. The procedures taken by the Savings &amp; Loan Association in June, 1972, prior to increasing the loan for the purpose stated, were ample to determine if the loan was a good investment for the Association. Several representatives of the Savings &amp; Loan Association and an independent realtor examined the property and reported to the Association's Loan Committee composed of four officers. The Committee did not include appellant. The regulations of the Association required that at least three members of the loan committee approve all loans. Undisputedly, the Savings &amp; Loan Association was interested in making loans for developing subdivisions. In addition to the benefits of the loan itself, the Association expected to finance the construction of future homes and receive benefits from assignments of mortgages thereon. The loan committee determined that Taylor's application constituted a good loan for the Association. It then entered into an agreement with Taylor, the agreement being handled by officers of the Association other than appellant, to increase the Taylor loan to $105,000. Taylor's application was accepted by the loan committee. The necessary papers were prepared and forwarded to a reputable attorney in Columbus for the loan closing. On the Association's instructions the papers were prepared and the loan funds were distributed as follows: $67,082.60 to the Savings &amp; Loan Association to pay the balance of the existing loan on the property; $2,100 to the Savings &amp; Loan Association as its processing or discount fee; $50 for preparation of the loan papers; the balance of $35,767.40 was delivered to the Savings &amp; Loan Association and placed in an escrow account to pay the cost of the street paving. Addition reveals that the above distributed loan funds constituted the exact amount of the loan and that Taylor received nothing. We should stop here and state that the loan in question was paid in full, together with complete interest and to the entire satisfaction and full recovery of the Savings &amp; Loan Association. This was done approximately four years before the present indictment was returned against appellant. The sole argument of the State in attempting to justify this prosecution was that the incidental second deed of trust was placed on the property in connection with the extensive financial dealings in Texas between appellant and Taylor. As hereinbefore stated, at no time did appellant make any attempt to benefit from this second deed of trust. In fact, it was at his suggestion that after the loan in question was made the Savings &amp; Loan Association entered into a joint venture with Taylor whereby the representatives of the Savings &amp; Loan Association and Taylor would jointly place the lots in the subdivision on the market, would handle the sales jointly, and each would receive one-half of the profits from such lot sales. This completely nullified any possible benefit appellant could have had under his incidental and unrecorded second deed of trust. No attempt whatever was made by appellant to benefit therefrom. The evidence in the record is undisputed that on prior occasions appellant, as head of the lending institution, had assisted the Association by personally arranging for the securing of property on which the Association would then make proper, adequate and sufficiently secured loans and would then enter into joint venture agreements with the owner, as was *1105 done during the pendency of the loan in question. The only chance taken in these transactions to benefit the Association was the chance taken by appellant. There are numerous cases interpreting the requirements to sustain a conviction under Code section 97-19-39, hereinbefore set out, and under which appellant was indicted. The basic three requisites were enunciated by this Court, through Chief Justice Gillespie, in the case of Hughes and Travis v. State, 326 So. 2d 469 (Miss. 1976). There the Court said: In Breland v. State, supra, the Court said of an indictment for false pretense involving the statute under which appellant was indicted that "another material element of this offense is that the false representation must have been relied on by the party defrauded." In Lee v. State, 244 Miss. 813, 146 So. 2d 736 (1962), the Court, through Justice Rodgers, held that in a prosecution under the false pretense statute in question it is necessary for the State to prove beyond a reasonable doubt that the accused made some false pretense in order to sustain a conviction. Admittedly the false pretense does not necessarily have to be shown by words alone. It may be shown by acts, conduct, or even silence. We do not find sufficient evidence in this record to hold that the State proved beyond a reasonable doubt that appellant made a false pretense that caused the Savings &amp; Loan Association any detriment. As hereinbefore stated, regardless of what was said or done, the Savings &amp; Loan Association lost nothing as a result thereof, but, on the other hand, made money as a result of a legitimate business transaction approved by the duly authorized officials of the Association. This was done after the Association examined, investigated and processed the loan application according to its established rules and regulations. In 35 C.J.S. False Pretense § 28, page 849, the prevailing rule is set out as follows: Under the above textbook quote, several Mississippi cases are annotated; Bruce v. State, 217 Miss. 368, 64 So. 2d 332 (1953); Simmons v. State, 160 Miss. 582, 135 So. 196 (1931); Overall v. State, 128 Miss. 59, 90 So. 484 (1922). In Overall, supra, in discussing the requisites of proving a charge of false pretense, it was stated: *1106 In Bruce v. State, supra, there was involved the identical false pretense statute with which we are involved in the case sub judice. The Court had the following to say: The loan to Taylor was made by Savings &amp; Loan Association after full investigation by its duly authorized representatives and approved by the members of the loan board (none of whom was appellant). The Savings &amp; Loan Association distributed no funds to anyone other than itself [except the $50 paid for preparation of papers]. The Association received all interest it requested. It asked for and received from Taylor a joint venture under which he and the Savings &amp; Loan Association would share in any profits from the sale of lots. The loan was fully repaid. It is undisputed that this business venture was the type the Savings &amp; Loan Association was looking for and was in the business to handle. It lost nothing, but on the other hand gained a profit. It received everything it requested or wanted. There was no fraud perpetrated on the Savings &amp; Loan Association. It is clear that the State in no way proved the charges in the indictment and it follows that this Court is required to reverse the cause and discharge the appellant. REVERSED AND APPELLANT DISCHARGED. PATTERSON, C.J., SMITH and ROBERTSON, P. JJ., and WALKER, BROOM, LEE and COFER, JJ., concur. SUGG, J., took no part.