Court Opinion

ID: 9463299
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:02:34.03511+00
Date Added: 2024-06-11T17:38:01.193253
License: Public Domain

RONEY, Circuit Judge,
dissenting:
I respectfully dissent. The only substantial issue of fact in this case is whether Kay “fraudulently obtained” the two credit cards involved. The Court holds that the jury could have found that when Kay obtained the cards, he intended not to pay the substantial charges that he would make against the cards several months after issuance. His failure to disclose this intention amounted to fraud.
In convicting on this theory, the jury was charged that the evidence would have to show that Kay obtained the cards by misrepresentation or concealment of a material fact. The court then made the charge to which the defendant takes exception: “A fact is material if it is a fact that a reasonably prudent credit company would require before issuing a credit card.” Although the majority admits that such charge might impermissibly broaden § 1644, in my judgment it clearly does so. Although we do not have to decide the issue here, I have little doubt that a statute which made it a crime to conceal from a credit card company a “fact that a reasonably prudent credit company would require before issuing a credit card” would be unconstitutionally vague.
The defects are obvious. First, such a statute would leave to conjecture a standard of conduct that lends itself to specificity. Second, varied credit card application forms clearly indicate that even credit companies do not agree on what they should prudently require, even if Congress might have some undisclosed specific standard in mind for such a statute. Third, such a statute would leave the determination to individual juries of what a prudent credit company would require, thus letting the crime vary from jury to jury. Fourth, the grand jury and the petit jury could use different standards so that a defendant might stand convicted by a petit jury of acts with which he had not been charged by the grand jury.
Significantly, there is no evidence whatsoever in this case about the requirements of prudent credit companies. Kay’s jury received no evidence by which it could determine if what he concealed was what a prudent credit company would require. To the contrary there is positive evidence that the minor misstatements Kay made on his application would not have deterred these two companies from issuing the cards.
The majority of this panel holds the charge to be harmless beyond a reasonable doubt. This cannot be so, however, because the Court posits its holding as to evidence *494sufficiency on the fact that Kay intended not to pay the charges. Neither company asked Kay whether he intended to pay the charges. The Diners Club application states that Kay “agrees to be responsible for all charges.” And he is, of course, responsible. He has never denied that. The Torch Club application agrees that all purchases charged under the card “is indebtedness of buyer.” The charges are his indebtedness. He has never denied that. He agreed to pay them in one of - two ways. Kay has broken these agreements. For that he is legally liable. But at no place on either application is Kay asked to give his state of mind.
Hornbook contract law holds that where a contract is clear, a state of mind is irrelevant to its enforcement. The credit companies- asked for, and obtained, legally enforceable agreements with Kay. The crucial act for which Kay stands convicted, however, is failing to tell the companies that in his mind he did not intend to fulfill his agreement. A reasonably prudent company, even a reasonably imprudent company, might not issue a card to an applicant who did not intend to pay, unless it thought the applicant available, solvent and legally responsible so that it could collect in any event. The agreement after all does carry a generous rate of interest on unpaid balances which are rather easily collectible through legal process against substantial borrowers.
In any event, on analysis, a charge that permits the jury to find guilt on concealment of a fact that a prudent credit company would require becomes the keystone to Kay’s conviction. If the concealed fact is intent, this charge is not harmless at all. I would hold that this charge misconstrues the statute under which Kay was charged and injected reversible error into his trial.