Court Opinion

ID: 9444807
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:12:30.86683+00
Date Added: 2024-06-11T17:30:00.576212
License: Public Domain

WILBUR K. MILLER, Circuit Judge
(dissenting).
When the essential ingredients of the crime of false pretense have been accurately ascertained, and when irrelevant facts in the evidence have been identified as such and eliminated, from consideration, I believe it will be apparent that the Government failed to make out a case for submission to the jury. It will then also appear, I think, that the trial judge erroneously refused to direct a verdict of acquittal, only because he mistakenly attributed significance to the fact that appellant’s automobile was damaged in a collision which occurred “early in October,” — at least two weeks after September 18, the day he purchased the two television sets and the washing machine from Potomac Distributors.
As to the ingredients of the offense. While our false pretense statute does not in express language require that the person from whom the property is obtained should be defrauded thereby,1 nevertheless the crime is not complete unléss he is in fact defrauded. • It was so held in Robinson v. United States, 1914, 42 App. D.C. 186, in accord with the general rule. 35 C.J.S., False Pretenses, § 26, p. 670. In order to convict' under the statute, the Government must therefore prove that in making a false pretense the defendant intended to defraud the person from whom he obtained property, and that he did thereby defraud him. The trial judge recognized this, and charged the jury accordingly.
Nelson did make a false representation; but the question is whether there was evidence from which the jury could properly be permitted to infer that he intended to defraud, and to conclude that Potomac was thereby defrauded.
As to the relevant evidence, which required acquittal. During the first eight and one-half months of 1952, Nelson had been a substantial and constant customer of Potomac. In that period his purchases amounted to more than $25,000 and he had always paid within the permitted 30-day credit period.2 But on September 18 his account, which then amounted to $1,697.87, included for the first time some charges more than 30 days old. When on that day Nelson wanted to buy on credit two television sets at $136 each, and a washing machine at $77.50, Potomac refused to make the sale unless he would give security for the total purchase price of $349.50, and would also secure the pre-existing indebtedness of $1,697.87.3 Nelson agreed to give a lien on the articles being purchased and on his Packard automobile as well, and signed a note for $2,047.37. He executed a chattel deed of trust on the two television sets and the automobile, •Potomac having purposely omitted the *27washing machine in preparing the instrument. He told the Schneider brothers, principal proprietors of Potomac, that he owed a balance of only $55 on his car, when in fact he owed a lien debt of $3,028.08 to a local bank. This is the false pretense upon which the indictment and conviction were based.
Of course it was very wrong of Nelson to make this false statement. But whether it was felonious or not depends on two questions: ( a) did he intend thereby to defraud, and (b) even if he did so intend, was Potomac actually defrauded?
Differing definitions of the word “defraud” probably cause the difference in opinion between the majority and me. They seem to think it means, in connection with a purchase, to make a false pretense in the process of obtaining goods even though the purchase price is well secured. I think the. word means, in connection with a purchase, to make a false pretense as a result of which the seller is deprived of his goods or of the purchase price. The difference is particularly important in a case like this one where a purchaser is charged with defrauding a seller. A purchaser can be said to have defrauded the seller of his goods only if he intended to defraud him of the purchase price for which the seller was willing to exchange them. It seems to me to follow that a purchaser who makes a false statement in buying on credit has not defrauded the seller of his goods if he nevertheless amply secures the debt. False pretense cases concerning the obtaining of property but which do not involve a situation where the purchaser was indicted have little application to this case. The Robinson case, for example, was one where the seller was indicted and convicted. That decision is useful here only for its statement that there must be actual defrauding.
In considering the criminality vel non of the false statement, it must be remembered that the past due indebtedness of $1,697.87 is to play no part. That credit had already been extended generally, and with respect to it Potomac parted with nothing on September 18. Nelson was only charged with defrauding Potomac by obtaining through false pretense the articles then delivered, which had a total value of only $349.50.
What was the actual value on September 18 of the property upon which Potomac took a lien, on the strength of which it parted with property worth $349.50? The bank collection manager, testifying for the Government, said that although on September 18 Nelson still owed the bank $3,028.08, he had on that day an equity in the car worth from $900 to $1,000. The mortgaged television sets were, I suppose, worth their price of $272. Adding to this the minimum equity in the automobile proved by the prosecution, it appears that Potomac had a lien on property worth at least $1,172 to protect a debt of $349.50. The proportion was more than three to one.
Such is the evidence as to what happened September 18, from which the jury was permitted to infer that Nelson then intended to defraud, and to conclude that he then did fraudulently obtain from Potomac the three articles purchased. As to intent, I suggest that it is wholly irrational to presume or infer that one intends to defraud when he buys goods on credit and safeguards that credit by giving more than triple security for it,— no matter if he does falsely pretend that the security is even greater. It is equally illogical to conclude that the creditor was thereby defrauded. For that reason, my opinion is that the proof I have outlined — which was the only pertinent proof — did not warrant the trial court in submitting the case to the jury.
The majority say the fact that the security was so ample is immaterial. In this connection they cite Robinson v. United States, supra, and refer to United States v. Rowe, 2 Cir., 1932, 56 F.2d 747. As I have already pointed out, the Robinson ease involved an indicted seller. Robinson had sold practically worthless shares of stock and we held he could not escape the imputation that he intended his false representations to defraud by simply saying “he believed the other was *28receiving something of substantial value.” This is vastly different from the present case where the indictment is against a purchaser who amply secured the payment of the purchase price. In the Rowe case the Second Circuit simply said -it had never accepted the rule that an actual defrauding is a necessary ingredient of the crime of false pretense. It is a general rule, however, and we accepted it years ago in the Robinson case. I do not understand the majority intend to' overrule that particular holding of that opinion, since they quote it and rely upon it. Moreover, I note the majority quote with approval a portion of the charge in which, inter alia, the trial judge told the jury that actual defrauding is an essential element of the crime.
As to the irrelevant evidence, which produced conviction. Why then did the trial judge let the case go to the jury? He knew an actual defrauding was necessary to conviction and, as I have said, so instructed the jury. And why, in the light of that instruction, and under Government proof which clearly showed. Potomac was not defrauded, did the jury, convict? Principally, I think, because of a subsequent fortuitous circumstance which Nelson could not have anticipated on September 18, and which of course was not the result of his deliberate act.
This circumstance was that some two weeks or more after the goods had been obtained, the mortgaged automobile was damaged in a collision to an extent estimated at about $1,000. If the damage was not compensated for by insurance or otherwise, the accident practically destroyed Nelson’s equity in the car. The bank seized the damaged automobile and disposed of it to a transferee, who evidently saw some equity still in it, as he paid the bank’s debt. Potomac seems to have stood idly by while this was going on, without taking any steps to protect its lien, which was or should have been then of record. If damages were collected by or for Nelson from a tort feasor, Potomac’s lien attached thereto. The record does not show whether such damages were or should have been recovered. It should be noted also that Potomac made, no effort to enforce its lien on the television sets.
Aside from all that, however, the salient point is that the reduction in the value of the automobile caused by the collision could not properly be considered by the jury; the question was as to its value September 18, for it was that value which should have been considered in deciding whether. Potomac had been defrauded. Had the trial judge observed this distinction, he would have directed a verdict of acquittal, since he was aware of the necessity that there be actual defrauding. The judge made this clear when he said in a bench colloquy: “Until I heard that there had been a wreck and the car had been, repossessed I thought maybe there was sufficient equity there to cover the loss sustained; and if that 'were the case there would be no defrauding.” I have demonstrated there was more than sufficient equity September 18 to cover the credit then extended, so there was no defrauding, even though an accident later impaired the margin of protection.
In addition to the irrelevant proof of the collision ’ damage, which should not have been received and without which an acquittal would have been directed, there was another irrelevancy in evidence which may well have played a part in moving the jury to its verdict: the preexisting indebtedness. Because of Nelson’s misrepresentation of his equity in the car, Potomac did not get, as it thought it was getting, security for both old and new debts with a margin of more than two to one. But, as has been shown, Potomac did get more than triple security for the goods which the indictment said were fraudulently obtained. It was therefore of first importance that the jury be told to disregard Potomac’s failure to get the security for the pre-existing debt which it had been led to believe it was getting, and to consider only whether Potomac had been defrauded out of goods worth $349.50. The jury should also have been told the reason for the distinction, for without it the lay jurors *29might have concluded — as apparently they did — that on September 18 Nelson defrauded Potomac with respect to the pre-existing indebtedness.
As I have said, Nelson was guilty of a moral wrong in falsely and grossly misrepresenting his debt to the bank, but in the circumstances he should not have been indicted and convicted because of it. The District of Columbia statute under which he was prosecuted does not make mere falsehood felonious; it only denounces as criminal a false pretense which was intended to defraud and which in fact had that result. Even a liar is entitled to the full protection of the law. I am afraid a grave injustice has been done in this case.

. Title 22, § 130ÍL, D.C.Code (1951), as amended in 1953, provides:
“Whoever, by any false pretense, with intent to defraud, obtains from any person anything of value * * * shall, if the value of the property or the sum or value of the money or property so obtained * * * is $100 or upward, be imprisoned not less than one year nor more than three years * *

. So said one of the complaining witnesses.

. The only exact figure given in evidence was the amount of the note, $2,047.37. I arrived at the amount of the pre-exist-ing debt, about which the witnesses were vague, by deducting from the face of the note the values of the three articles as given in the indictment: two television sets at $136 each, and a washing machine at $77.50.