People v. Jones

Defendant was charged with two counts of grand theft, each relating to a separate transaction with a different person: (1) $6,000 from E. Y. Masi and (2) $4,000 from Thomas W. Patterson. He pleaded not guilty to both counts and waived a trial by jury. The case was submitted upon the testimony taken at the preliminary hearing and additional evidence introduced by both parties. The court found defendant guilty on both counts, and granted leave to file an application for probation, upon the hearing of which the proceedings were suspended and defendant was placed on probation for five years. Defendant made a motion for a new trial, which was denied. He has appealed from the order denying his motion for a new trial and has purportedly appealed from an alleged “judgment of sentence and conviction. ” Since the court did not pronounce judgment but suspended proceedings and granted probation, the purported appeal from the judgment will be dismissed. (People v. Guerrero, 22 Cal.2d 183 , 184 [ 137 P.2d 21 ].) There remains for consideration only the appeal from the court’s order denying defendant’s motion for a new trial. (Pen. Code, § 1237.)

As ground for reversal, defendant argues the single point that the evidence was insufficient to sustain his conviction of grand theft “sounding in false pretenses.” In resolving this issue, it is the settled rule that an appellate court “will decide only whether upon the face of the evidence it can he held that sufficient facts could not have been found by” the trial court to warrant its implied findings, and before they “can be set aside ... it must be made clearly to appear that upon no hypothesis whatever is there sufficient substantial evidence to support the conclusion reached in the court below.” (People v. Newland, 15 Cal.2d 678 , 681 [ 104 P.2d 778 ].) Applying this rule, defendant’s claim as to the insufficiency of the evidence cannot be sustained.

Defendant and two others, Stock and Parsons, were co-partners engaged in the conduct of an insulating business under the name of Sun Supply Company. After some few weeks of operation, defendant induced Masi and Patterson

It appears from the testimony of Masi and Patterson that defendant induced their 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—particularly “another truck”—required because of the volume of business being done.by the firm. In reality, the firm had so little business that the equipment already possessed by it was sufficient to take care of its needs, covering advance orders for but “three or four days” instead of the represented “month’s steady work” as already assured, with a single truck making an “average” return of “$200 a day.” Masi accordingly advanced $6,000 and Patterson advanced $4,000. Upon objection to Patterson entering into the business, Masi was given a refund of $1,000. By way of salary and pro rata share upon dissolution of the business, Masi received approximately another $1,000 and Patterson $900. The management of the business was left to defendant and his two original partners. Masi and Patterson did not desire, and did not have, authority to sign checks on the partnership bank account, apparently on the ground that there were already “enough” names on the signature card.

The crimes of larceny, embezzlement, obtaining money by false pretenses and kindred offenses are now all included

There appears to be abundant evidence to support the trial court’s implied findings that false representations were made by defendant with intent to defraud Masi and Patterson, that the latter two men believed and relied upon such representations and while so believing, parted with the sums of $6,000 and $4,000, respectively. Prom the record it might justifiably be inferred that defendant not only fraudulently inveigled Masi and Patterson to join the partnership and pay over their moneys, but that he had planned to use a large part of their investment to discharge old debts of the firm before they would have time to discover his fraud; that defendant had no intention of purchasing new equipment with their money but stealthily intended to, and did cause, the mortgage indebtedness incurred by himself and Stock to be satisfied promptly with the new funds, as well as his own previous advancements to the firm, and that commensurate with the amount of business being done, no new equipment was required at all; that neither defendant nor

However, defendant maintains that his conviction may not be sustained because the evidence does not show that he acquired the money of Masi and Patterson or appropriated or converted it to his own use. He concedes that Masi and Patterson relied on his representations in making their investments in the business but he argues that they parted “with the possession of and title to their money to [the] partnership,” of which they then became members, and not to him; that the “moneys of all partners were dissipated in the conduct of the partnership, [which thereupon] was dissolved,” and “nowhere in the evidence does it appear that [he] received any moneys or took any moneys from the partnership or from the complaining witnesses.” In support of his position he relies on the case of People v. Cravens, 79 Cal. App.2d 658 , 662-663 [ 180 P.2d 453 ], for the proposition that “the procuring of money to be contributed to the capital of a partnership of which the victim is a member cannot constitute the crime of obtaining money by false pretenses because the victim as partner retains an interest in the fund. ’ ’ But an analysis of the factual situation in that case demonstrates it to be readily distinguishable. There the deceived party, one Mrs. Reame, was fraudulently induced by the appellant to enter into a partnership with him for the manufacture of adhesive gauze bandage, upon the representation that he had been successfully engaged in that business in the past and “knew everything there was to know about [it].” Accordingly, she deposited certain funds “in a bank account subject to withdrawal by herself, her son and the appellant. ’ ’ She drew a few checks on this account for her own living expenses and personal use, but the large part of the fund was used to pay “partnership expenses” with the “bulk of the money . . . drawn out by checks signed by appellant.” (P. 661.) Upon exhaustion of the partnership funds and the failure of the business, the fraudulent character of the transaction was presented to the court for disposition upon the charge of grand theft. In passing upon the validity of appellant’s conviction upon the theory that he had obtained money by false pretenses, the court observed, at page 663, that “the crime . . . was not complete until the withdrawal

Moreover, in so discussing the nature of the criminal charge against the appellant in the Cravens case, the court expressly noted at page 663: “We are not satisfied that proof that the wrongdoer afterwards converted the partnership property to his own use while the victim was still subject to the influence of his false pretenses would not constitute the crime of obtaining money or property by false pretenses . . . [Otherwise] any confidence man could safely operate through the medium of forming a partnership with his victim and then appropriating the assets of the partnership . . . That the wrongdoer gets the property in two steps rather than one where a partnership with his victim is formed should not absolve him of the crime of obtaining money or property by false pretenses where the false pretenses continue to operate up to the moment of his wrongful appropriation of the partnership assets contributed by his victim.” So within this rationale is the present case where defendant, while Masi and Patterson were still under the influence of his false pretenses, converted the property to his own use, not only in the reimbursement of his previous advancements to the firm ($1,200) but also in the discharge of mortgage obligations of the original partnership of which he was a member ($2,979.72), for which indebtedness .the partnership’s equipment was pledged as security. Yet Masi and Patterson were led by defendant to believe that for their investment not only would they as partners receive the benefit of the firm’s present equipment, as then allegedly owned outright by it, but in addition they would have the benefit of the new equipment to be purchased with their money to meet the falsified expanding needs of the business.

Furthermore, in contrast with the situation in the Cravens ease, here Masi and Patterson, the deceived parties, did not have actual control of the partnership funds at any

Also, contrary to the Cravens case, defendant’s appropriation of the partnership funds as augmented by the investment of Masi and Patterson was definitely established in the amounts above set forth, with the respective withdrawals being made within a few days after the capital contribution in question. Under such circumstances, it is not necessary that the money was obtained by defendant for himself, but it is sufficient if it appears that as the result of his false representations, the money was “delivered to another, either for the benefit of that other or for [defendant’s] benefit.” (Levy v. Industrial Finance Corp., 16 F.2d 769 , 771; People v. Woods, 59 Cal.App. 740 , 742 [ 212 P. 41 ]; see, also, People v. Rabe, 202 Cal. 409 , 423 [ 261 P. 303 ]; People v. Coffelt, 140 Cal.App. 444 , 449 [ 35 P.2d 374 ].) So here, defendant through fraudulent representations induced Masi and Patterson to deliver their money to the partnership for its benefit as originally formed, and the use of such funds in the payment of its old debts redounded directly to defendant’s benefit. From such considerations, as the distinction was noted by the court in the Cravens case at page 663, it might readily be inferred that “the partnership was used as an artifice or a part of a scheme to defraud and not as a going concern in good faith.” The bona tides of the partnership was a matter for the trial court to determine, and apparently in the light of the evidence, it resolved that point adversely to defendant. (People v. Sheen, 93 Cal.App.2d 489 , 491 [ 209 P.2d 132 ].)

Closely parallel is the case of People v. Helmlinger, supra, 69 Cal.App. 139 , where defendant was convicted of the crime of .obtaining money by false pretenses. The specific charge rested on defendant’s fraudulent inducement of the complaining witness to buy a one-half interest in a certain real estate business that defendant represented he was then operating and as to which he falsely stated the earning capacity. In challenge of the propriety of his conviction, defendant contended that “the complaining witness received what he bar

Likewise here, Masi and Patterson, though admitted as members of the partnership in return for their respective investments, did not get that for which they bargained—an interest in a partnership represented as having all its equipment paid for; as then earning from the use of its truck an average of $200 a day; and as needing, because of advance orders, an additional truck so they could make another $200 a day. (People v. Ingles, 117 Cal.App. 22 , 24 [ 3 P.2d 341 ]; see, also, In re Severin, 188 Cal. 348 , 349 [ 205 P. 101 ].) As the facts concerning the partnership business were so misrepresented to Masi and Patterson, the trial court impliedly found that defendant’s dealings were not bona fide, which conclusion finds support in the record and is binding on this appeal. (People v. Raines, 66 Cal.App.2d 960 , 962 [ 153 P.2d 424 ].) The fact that Masi was refunded the amount of $1,000 of his original $6,000 investment, and that both Masi and Patterson received back the respective sums of $1,000 and $900 by way of salary and pro rata payments made on dissolution of the partnership, does not avail defendant here. A complete loss of property need not be shown to support a charge of obtaining money under false pretenses. (People v. Bryant, 119 Cal. 595 , 597 [ 51 P. 960 ].) Defendant, having perpetrated a fraud through the device of a partnership, cannot escape criminal liability by reason of that same device upon the theory that the defrauded

The order denying defendant’s motion for a new trial is affirmed, and his purported appeal from the “judgment of sentence and conviction” is dismissed.

Gibson, C. J., Shenk, J., Edmonds, J., Carter, J., Traynor, J., and Schauer, J., concurred.