Opinion
Page __
__ Cal.App.2d __ 215 P.2d 750 PEOPLE v. JONES. Cr. 4411. California Court of Appeals, Second District, Second Division March 13, 1950.Hearing Granted April 11, 1950.
Subsequent opinion 224 P.2d 353.
Horace Appel, Los Angeles, for appellant.
Fred N. Howser, Attorney General, Donald D. Stoker, Deputy Attorney General, for respondent.
WILSON, Justice.
The question to be determined upon this appeal is whether a person is guilty of grand theft when he induces another to part with his money by false representations or by trick and device and the money is not paid to or retained by the defendant for his own personal use but is paid to a partnership in which both parties and others are partners and is used in part to liquidate debts of the partnership existing at the time the false representations were made.
Defendant was convicted on two charges of grand theft, (1) of $6,000 from E. Y. Masi, (2) of $4,000 from Thomas W. Patterson. He has appealed from the order denying his motion for a new trial and has purportedly appealed from the 'judgment of sentence and conviction.' Since no judgment was pronounced but proceedings [215 P.2d 751] were suspended and defendant was granted probation, the purported appeal from the judgment will be dismissed.
The evidence shows that defendant and two others, Stock and Parsons, were co-partners doing business under the name of Sun Supply Co.; by means of defendant's false representations concerning the business conducted by them Masi and Patterson were induced to pay the respective sums above mentioned to the partnership by checks payable to the Sun Supply Co., which were deposited in the partnership bank account; articles of copartnership were signed by defendant, Parsons, Stock, Patterson and Masi; part of the money was used for the purpose of paying pre-existing debts of the partnership, including a chattel mortgage on partnership property and money previously advanced by defendant for partnership business; portions of it were paid during the existence of the partnership to each of the five partners as salary or compensation for services rendered after the money had been paid into the partnership treasury by Masi and Patterson; the partnership terminated about 30 days after the money was advanced by Masi and Patterson, whereupon its business and affairs were turned over to a law firm for the purpose of dissolution; after paying the existing debts and the cost of the liquidation proceedings the remainder was divided equally among defendant, Stock, Patterson and Masi. Parsons not having invested any money did not receive any part of the proceeds.
The applicable portions of the Uniform Partnership Act found in the Corporations Code are as follows: Masi and Patterson as partners were co-owners with the other partners of the business and assets of the partnership. Sec. 15006. All property acquired on account of the partnership, including the money paid into its treasury by Masi and Patterson, became the property of the partnership. Sec. 15008. Every partner was an agent of the partnership for the purpose of its business. Sec. 15009(1). All partners had equal rights in the management and conduct of the partnership business. Sec. 15018(e). The property rights of each partner were (1) his rights in specific partnership property, (2) his interest in the partnership, and (3) his right to participate in its management. Sec. 15024. Each partner was a co-owner with his partners of the partnership property, in which was included the funds above mentioned, holding as a tenant in partnership. Sec. 15025(1). One of the incidents of such tenancy was that each partner had an equal right with his partners to possess the partnership property for partnership purposes. Sec. 15025(2)(a). Upon the formation of the partnership all the foregoing rights, privileges and incidents accrued to Masi and Patterson as well as to defendant and the other partners. Defendant's rights were no greater than those of the other partners. When the chattel mortgage was discharged the personal property of the partnership covered by it was released from the lien to the benefit of all partners alike.
The crimes of larceny, embezzlement, obtaining money by false pretenses and kindred offenses are now all included under the designation of theft, Penal Code, sec. 484; People v. Myers, 206 Cal. 480, 483, 275 P. 219, but the elements of the several offenses have not been changed. People v. Selk, 46 Cal.App.2d 140, 147, 115 P.2d 607. In a prosecution for any such offense it is necessary to prove that the accused obtained money, property or services by any of the means denounced by the statute. Defendant did not 'obtain' the money of Masi and Patterson as that word is defined. When they paid their funds into the partnership account defendant did not acquire either title thereto or possession thereof. Both title and possession passed to the partnership. 'To obtain' means to gain possession fo, to procure (Webster's New Int.Dict.,1947 Ed.), to acquire title to or ownership of property. People v. Shapiro, 299 Ill.App. 255, 20 N.E.2d 107, 108. To sustain a conviction of obtaining money either by false pretenses or by trick and device the evidence must show that the accused acquired the money or appropriated or converted it to his own use. Where the evidence shows, as it does in the instant case, that the money of the prosecuting witnesses passed [215 P.2d 752] into and became part of the assets of a partnership in which they, defendant and others were partners, the money was not 'obtained' by defendant and he is not guilty of obtaining money by false pretenses. State v. Woerth, Mo.Sup., 256 S.W. 456, 459; State v. Smalley, Mo.Sup., 252 S.W. 443, 445. In a prosecution for obtaining money by false representations it is necessary to prove that the defendant obtained and received the money. Proof that it was received by a third person is insufficient to sustain a conviction. Willis v. People, 19 Hun, N.Y., 84, 86.
The fact that Masi and Patterson did not have authority to sign checks on the partnership bank account is not an element aiding the prosecution. (1) The evidence is uncontradicted that when it was suggested by others that they be given such authority both refused, saying there were already sufficient names on the signature card. (2) Their lack of access to the bank account does not qualify their co-ownership of the funds. (3) The vesting of complete control in one partner of the entire business of the partnership enterprise or of any part of it does not negate the existence of a partnership or of the partnership rights of any member of it. Lyon v. MacQuarrie, 46 Cal.App.2d 119, 124, 115 P.2d 594; Thompson v. O. W. Childs Estate Co., 90 Cal.App. 552, 554, 266 P. 293.
The cases cited by the Attorney General, in which the accused obtained money or property for his own benefit either by fraudulent representations or by trick and device such as People v. Hennessey, 201 Cal. 568, 258 P. 49; People v. Kirsch, 204 Cal. 599, 269 P. 447; People v. Mason, 86 Cal.App.2d 445, 195 P.2d 60; People v. Barnett, 31 Cal.App.2d 173, 88 P.2d 172, do not sustain defendant's conviction since in none of those cases did money or property become an asset of a partnership but in each case the defendant personally received the money or property and appropriated it to his own use.
The order denying defendant's motion for a new trial is reversed and his purported appeal from the 'judgment of sentence and conviction' is dismissed.
McCOMB, J., concurs.
MOORE, Presiding Justice.
I dissent.
That the representations made by appellant to both of the complainants were false, that they were believed and relied on by those gentlemen who while believing parted with $6,000 and $4,000 respectively--these things were finally determined by the trial court upon abundant evidence. So far as the facts are concerned the appellate court will decide only whether upon the face of the evidence it can be held that sufficient facts could not have been found by the trial court to warrant its implied findings. Before they can be upset the findings must be demonstrable that upon no hypothesis was there sufficient substantial evidence to support the determination of the court below. People v. Newland, 15 Cal.2d 678, 681, 104 P.2d 778. Indeed, appellant does not deny that the recited facts were established. His contention is that they are not sufficient to constitute a crime. He maintains that he did not receive the moneys but that instead they were paid to the partnership of which Masi and Patterson were members and that since as such members they had control over the funds after payment to the partnership they did not lose title and possession of their moneys and therefore appellant did no wrong.
In support of such contention appellant cites People v. Cravens, 79 Cal.App.2d 658, 180 P.2d 453. That this decision does not support his contention will readily appear. Cravens fraudulently induced one Mrs. Reame to join him in a partnership for the manufacture of adhesive gauze bandage. She deposited funds in the bank subject to withdrawal by herself, her son and Cravens. This was subsequently increased by deposits of other smaller sums by Mrs. Reame. The fund was used in paying her personal expenses as well as those of the partnership. Because the gauze business failed she laid her grievance before the court. The conviction of Cravens was reversed because the title of Mrs. Reame's money was not transferred to Cravens. She had actual control of the funds at all [215 P.2d 753] times while he never withdrew or appropriated to his personal use any part of it.
In the instant case a far different situation obtains. The implied findings mean substantially that appellant not only fraudulently inveigled his victims to join the partnership and pay over their moneys but that he had planned to pay out a large percentage of their investments on old debts of the firm before they would have time to discover his fraud; that he had no intention of purchasing new equipment with their money but stealthily intended to and did cause the mortgage indebtedness to the bank incurred by himself and Stock to be paid promptly with the new funds and acquired no new equipment at all; that neither appellant nor his colleagues took Masi or Patterson into the inner sanctum of their organization but by clever manipulation and suggestion induced complainants to be so occupied with sales and dreams of big profits that the latter were led to believe that the handling of details by appellant, Parsons, and Barnard would operate to the advantage of complainants; that to this end it was arranged for the original partners to write all checks against the bank account to the exclusion of complainants who never checked out a dime; that in so far as complainants are concerned the Sun Supply Company was a mere device, a canopy to give glamour to the representations of appellant as to the earning power of the group; that in order more successfully to enable appellant and his confederates to appropriate the greater portion of the $10,000 to their own use complainants were not placed in positions of responsibility whereby they might know at once of the disposition of their invested capital; that by the use of the partnership name and pretended business plans appellant and his confederates erected what they deemed a fortress against conviction. Therefore, concluded the court, defendant is guilty of grand theft.
The majority opinion places reliance upon the evidence that when it was suggested by others that complainants be given authority to sign checks on the partnership bank account, they refused the privilege. The implied finding is that when such suggestion was made complainants were still under the spell cast by the representations of appellant. They had been induced to believe that the fields were so ripe unto the harvest that they would be reaping profits every hour of a working day and could therefore not afford to spend time doing clerical work.
The law does not avail appellant. Where a person is induced to part with his money with the understanding that it is to be used by the accused to accomplish a definite object and it is not so used, theft by trick and device has been committed. People v. Hennessey, 201 Cal. 568, 582, 258 P. 49; People v. Mason, 86 Cal.App.2d 445, 450, 195 P.2d 60; People v. Barnett, 31 Cal.App.2d 173, 174, 88 P.2d 172; 32 Am.Jur., p. 914; Corp. Code, sec. 15017. In People v. Kirsch, 204 Cal. 599, 269 P. 447, 449, a conviction for grand larceny was affirmed. The defendant's company had purchased certain lead junk to be weighed at the yard of the telephone company. Defendant so ingratiated himself with the employees of the company that they permitted him instead of the seller to weigh the junk. He caused a very heavy load of lead-covered cable to be placed on a truck from which he had 10,000 pounds to be first unloaded into a boxcar, the balance to be weighed and a weight certificate to be issued which he used in reporting the weight of the load, thereafter making no accounting to the seller of the portion removed before weighing. The court held that because the defendant by his acts so ingratiated himself with the employees of the telephone company that they permitted him to supervise the weighing instead of having the same done by the seller as agreed was with the felonious design to place himself in a position to deceive, cheat and defraud the seller out of its property. 'That this element of the crime of larceny by trick and device was present can admit of no reasonable doubt.' In People v. Mason, supra, it was held that Mason's promise that his company would begin drilling again and that the company planned to drill other wells was a trick and device whereby to acquire possession of the complainant's automobile. It thus appears from the last two [215 P.2d 754] cited decisions that a party may by trick and device create a contract with a felonious design and thereby gain possession of the property of such other. Appellant's conviction necessarily implies the court's finding that the false statements of appellant and his promise to acquire a new truck and blower were a trick whereby to ensnare and hold the will and judgment of complainants until their money had been appropriated.
Now, if appellant perpetrated a fraud upon complainants by use of the device of the partnership, can he be immune from conviction by reason of the same device? Stripped of all dialectics nothing remains of the narrative here involved but two men looking foolish at another who got their money, used it for purposes other than those he promised while he in effect exclaims that 'their partnership used their money.' He suppressed the fact of the outstanding debts which he and Stock and Parsons had incurred and that such debts would be paid with their money. Neither then nor at any other time were complainants' moneys liable for such debts, for the reason that having been obtained by trick and device, ownership thereof did not pass to the partnership. It continued to be the money of complainants, held in trust by appellant and his confederates and embezzled by them by virtue of their payment thereof for uses other than those projected by appellant as inducements to invest. The judgment implies a finding that complainants intended to part with possession merely and not to transfer title as well and from such finding appellant's guilt was correctly concluded. People v. Fawver, 29 Cal.App.Supp.2d 775, 77 P.2d 325, 327. Numerous cases are listed by Judge Shaw in the Fawver decision in which he states that 'all of these cases adhere to the rule stated. The passing of title referred to in the rule is the complete title to the property * * * if the victim retains an interest therein, there may be a larceny.' In view of the conversations between appellant and the two complainants the court was warranted in finding an implied agreement of appellant that he would use the money for no purpose other than to purchase new equipment and if not so used it would be held to the account of investors.
The judgment and the order denying the motion for a new trial should be affirmed.