BOLET v. UNITED STATES, 417 A.2d 386 (D.C. 1980)

No. 79-652.District of Columbia Court of Appeals.Argued April 9, 1980.
Decided June 13, 1980. Rehearing and Rehearing En Banc Denied August 1, 1980.

Appeal from the Superior Court, District of Columbia, Leonard Braman, J.

Melvin G. Bergman, Riverdale, Md., for appellant.

Thomas C. Hill, Asst. U.S. Atty., Washington, D.C., with whom Charles F. C. Ruff, U.S. Atty., John A. Terry, Michael W. Farrell and James M. Hanny, Asst. U.S. Attys., Washington, D. C., were on the brief, for appellee.

Before KELLY, NEBEKER and PRYOR, Associate Judges.

KELLY, Associate Judge:

Appellant was found guilty of false pretenses, D.C. Code 1973, § 22-1301, by the Honorable Leonard Braman, sitting without a jury. On appeal, he challenges Judge Braman’s ruling that a conviction for false pretenses may lie where the misrepresentation is made to a third party rather than directly to the victim. We agree with the analysis contained in Judge Braman’s excellent opinion, attached as an appendix hereto and adopt it as our own. Accordingly, the judgment of conviction on appeal is

Affirmed.

APPENDIX MEMORANDUM AND OPINION
The question at bar is whether the scope of our false pretenses statute, 22 D.C. Code § 1301 (1973), is limited to misrepresentations made by a defendant directly to his victim. The issue arises in a non-jury trial at which, after hearing testimony, the court made findings of facts and conclusions of law from the bench. The legal issue here posed was taken under advisement; following the submission of memoranda, the court resolved the question against the defendant and pronounced him guilty on February 16, 1979. The essential findings may be summarized as follows:

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I
Ruth Blair, the complaining witness, is a 72 year old woman with a 6th grade education. She is unknowledgeable in business matters, including the purchasing and financing of automobiles.

On March 21, 1977, Ms. Blair, accompanied by her apparent common law husband, went to Senate Dodge in the District to trade in her old car and buy a new one. Although Ms. Blair did not drive, her husband did and chauffeured her about. Ms. Blair purchased a 1977 Dodge Aspen after the salesman cleared the purchase with Senate’s general sales manager, the defendant, Lawrence Bolet. The purchase price was $5,843.75 (including $298.75 in government charges). Ms. Blair made a downpayment of $843.75 leaving a balance of $5,000 outstanding.[1]

Later the very same day, the husband died. Since Ms. Blair had no further use for the car, she called the salesman on the following day, March 22, explained the circumstances, and stated that she wished to return the car and cancel the purchase. The defendant, when informed of this advised the salesman that Ms. Blair would be required to pay an additional charge of $500 for return of the car. After telling the defendant that his position was unfair, the salesman (with the permission of Senate’s president) stopped the transmittal of the car’s title papers to the District. This permitted Senate, if it accepted return of the car, to resell it to another customer as a new car. Later, when he learned that Ms. Blair would be asked to sign a note for $500, the salesman called her and advised her against doing so. At some point during that day, Ms. Blair spoke with the defendant who, being unable to induce her to keep or dispose of the car, agreed to try to sell it for her.

On the following day, March 23, the car was driven by a friend to Senate. Pursuant to defendant’s statement to Ms. Blair that the car would have to be sold as a used car and at defendant’s direction, the car was parked on the used car lot. He also told the complainant that Senate would charge her an additional $500 for the return of the automobile. Ms. Blair demurred and left the car at Senate.

Later, the defendant sent another salesman to the complainant’s home to obtain her signature on a (1) $500 note and (2) a contract for Senate’s repurchase of the car. Being determined not to sign the note and forewarned by the first salesman’s call, Ms. Blair refused to answer the door.

On March 25, the complainant went to the D.C. Department of Consumer Protection where she was assisted by a Mr. Ruiz. Ruiz called the defendant in the complainant’s presence and inquired about the transaction. The defendant, aware that Ms. Blair was in Ruiz’s office seeking his advice and help, stated that: (1) The car was now a used car and Senate could not sell the car as a new one; (2) The car had depreciated and he would not permit rescission unless Ms. Blair signed a $500 note to cover the depreciation; and (3) The car’s value was $4500, and he would try to sell it for that price. He promised to inform Ruiz later that day of the status of the car. When Ruiz called the defendant later the same day, the defendant told Ruiz that he had found a buyer for the car for $4500. These representations were made to persuade Ruiz and Ms. Blair that, because of the continuing depreciation of the car (which she could not drive), the note should be signed promptly in order to avoid further loss through depreciation. Further the representations were made to Ruiz with the intent that he repeat them then and there to Ms. Blair advise her to sign the note. In short, the defendant used Ruiz as a conduit through which his representations passed to the complainant who was then present in Ruiz’s office.

Ruiz, persuaded by the defendant’s representations, repeated them to the complainant and advised her to sign the $500 note.

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In reliance upon the representations and Ruiz’s advice, Ms. Blair reversed her position against signing the note.[2]

The defendant knew that his representations were false: (1) There was no interested buyer for the car on March 25, the day defendant spoke with Ruiz; (2) Senate was able to treat the car as a new car on resale;[3] and (3) The car had not depreciated $500.[4] The defendant’s intent, beginning on March 22, when Ms. Blair called to cancel the sale, was to defraud her.

Ms. Blair returned to Senate to sign the note on March 28, 1977. Only the day before, however, Irene Broadnix had signed a contract to buy the Blair car from Senate for $5,326.75. Although originally written up as a used car, the purchase order was changed to reflect the sale of a new car. The defendant was apprised of the details of this transaction.

When Ms. Blair later came in to sign the note, the defendant spoke to her and directed her into an office to sign the $500 note. Ms. Blair complied and, in the presence of a salesman (the same person who had gone to her house to get her to sign the note and later sold the car to Broadnix), executed the note and, unbeknownst to her, a repurchase agreement selling the car back to Senate. At no time did the defendant correct any of his misrepresentations of March 25. Specifically, although he knew even as Ms. Blair was signing the note that Senate had contracted to sell the car as new to Broadnix for $5,326.75, the defendant did not modify his misrepresentations, previously funnelled through Ruiz, that the car was a used car and had a value of only $4,500. Ms. Blair executed the instruments on March 28, 1977, in reliance upon those misrepresentations.[5]

Later in the same day, March 28, Ms. Broadnix returned to Senate. A second purchase order was signed which increased the price of the car by $290.85 to $5,617.60, and the car was sold on that basis.[6]

II

Our statute (§ 22-1301) provides that Whoever, by any false pretense, with intent to defraud, obtains from any person any service or anything of value, or procures the execution and delivery of any instrument of writing . . . or the signature of any person, as maker, endorser,

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or guarantor, to or upon any bond, bill, receipt, promissory note, draft, or check, or any other evidence of indebtedness, . . . shall be . . . [punished].

It is apparent that the statute does not by its terms exclude the misrepresenter whose lie is passed on through a third person. The defendant, however, contends that Foster v. Goldsoll, 48 App.D.C. 505 (1919), authoritatively read into the statute a requirement of direct communication.[7]

Neither our false pretenses act nor Foster was an expression of first impression. Rather they are part of a history of consumer law which stretches back over several centuries during which legislators and judges struggled fitfully to subject the machinations of the swindler to the rule of law. The District’s statute reflects one of the earliest efforts to redress the problem through the use of criminal sanctions. Robinson v. United States, 42 App.D.C. 186, 192 (1914), recognized that “[o]ur false pretenses statute, like most American statutes on the subject, is modeled after the statute of 52 Geo. III, chap. 64, ¶ 1 [1812].” But the roots of our statute go deeper, for in enacting it (and the predecessor District statute on false pretenses[8] ) “Congress had . . in view” the earlier English statute of 1757, 30 Geo. 2, c. 24, § 1, Jones v. United States, 5 D.C. (5 Cranch) 647, 654 (1840) (Cranch, C. J.),[9] an enactment which appears to have been common law in this country. Biddle v. United States, 156 F. 759, 762 (9th Cir. 1907).

The English cases leave little doubt as to how the question at bar would be resolved under that country’s false pretenses statutes (which shaped the law of our own jurisdiction). In the leading case, The Queen v. Butcher, 8 Cox C.C. 77, 169 Eng. Rep. 1145 (1858), the defendant promised to tip a young boy if he obtained the wages of two workers from their employer. The youth obtained the money after representing that he had been sent by the employees for it. While faulting the government’s case because of a defective indictment, Butcher made a significant contribution to the criminal law by establishing that one who wilfully instigates a false representation may violate the false pretenses statute. The defendant was “responsible for the representation made by the boy as his innocent agent” and was as culpable “as if he, the prisoner, had gone to the pay-table and made the false representation himself.” Id. at 83, 169 Eng.Rep. at 1150.[10]

That guilt could attach by instigating deception through an innocent intermediary was earlier recognized by the trial court in The Queen v. Brown, 2 Cox C.C. 348 (1847) (false representation to A that B‘s goods were delivered, thereby causing B to make payment). Brown held “[t]here was nothing in the Act of Parliament which made it necessary that the pretence should be made

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to the same person as the money was obtained from; and when it was said that ‘by means of the said false pretences’ the money was obtained, that was a question of evidence; and if there were any means to shew that pretence to A. operated on the mind of B., it might be shewn in evidence.” 2 Cox C.C. at 352 Cf. The Queen v. Rouse, 4 Cox C.C. 7 (1849) (false representations to A by which money was obtained from A throug B; the court likened B, an innocent actor, to a “mechanical instrument” whose participation makes possible the accomplishment of the crime of false pretenses).

III
The general receptivity of English courts toward their false pretenses law was incorporated at an early date into the law of the District of Columbia in Jones v. United States, 5 D.C. (5 Cranch) 647 (1840). Chief Judge Cranch rejected a pinched construction of the District’s false pretenses statute by quoting Lord Kenyon in Young v. The King, 3 T.R. 98, 102 (1789):

[B]ut when the criminal law happens to be auxiliary to the law of morality, I do not feel an inclination to explain it away. Now this offence is within the words of the act; for the defendants have, by false pretences, fraudulently contrived to obtain money from the prosecutor; and I see no reason why it should not be held to be within the meaning of the statute.

5 D.C. (5 Cranch) at 653-54 (emphasis added). The gloss thus given to our statute’s expansive words enabled it to vie with the diversity and ingenuity of the swindler’s schemes.[11]

The courts, of course, were hardly inventing new doctrine in condemning false pretenses perpetrated through an innocent instrumentality. The rule in Butcher is but a corollary of the well-established proposition that was recognized 31 years before in United States v. Gooding, 25 U.S. (12 Wheat.) 460, 469, 6 L.Ed. 693 (1827), as

the known and familiar principle of criminal jurisprudence, that he who commands, or procures a crime to be done, if it is done, is guilty of the crime, and the act is his act. This is so true, that even the agent may be innocent, when the procurer or principal may be convicted of guilt. . . .

Accord, Beau Soliel v. United States, 71 App.D.C. 111, 116, 107 F.2d 292, 297 (1939); Maxey v. United States, 30 App.D.C. 63, 75-76 (1907).

The clinching link between the instrumentality doctrine developed in the English false pretenses cases and the law of the District of Columbia was established in Robinson v. United States, supra, which dealt with false representations in the sale of stock. In the classical definition of false pretenses for this jurisdiction, the court stated,

The elements of the offense are a false pretense or false representation by the defendant or someone acting for and instigated by him, knowledge by the defendant as to the falsity, reliance on the pretense or representation by the person defrauded, intent to defraud and an actual defrauding.

42 App.D.C. at 192 (emphasis added). Culpability for misrepresentation by proxy is also confirmed by our statute’s use of the word “procures” when it condemns the deceiver who “procures the . . . signature of any person, as maker . . . to or upon any . . . promissory note” —

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the very instrument obtained from Ms. Blair, the complaining witness at bar.[12]

IV
The weight of authority in this country, as in England, heavily preponderates towards criminal liability for misrepresentation by proxy. In the leading case of Boushea v. United States, 173 F.2d 131 (8th Cir. 1949), the defendant-warehouser, intending that his misrepresentation be reiterated to the Department of Agriculture, told a farmer that his stored potatoes had fallen below grade, it being the defendant’s scheme that the government would then issue a “dumping order” allowing the potatoes to be disposed of while the farmer received an appropriate credit on his government loan. In fact the potatoes conformed to grade specifications; and when the plan succeeded, the defendant proceeded to dispose of them at a profit. Although prosecuted for making a false claim against the government, the law of false pretenses was applied, and the transaction was viewed in terms of the defendant’s knowing use of an “innocent agent” (the farmer) to repeat his false representation to the government. Accord, People v. Mutchler, 309 Ill. 207, 140 N.E. 820 (1923) (defendant instigates innocent bank customer to falsely represent defendant to bank as successful businessman); State v. McCormick, 57 Kan. 440, 46 P. 777 (1896) (purchase of horse by worthless check innocently represented by third person to be good).

Closely analogous is the oft-cited case of Commonwealth v. Johnson, 167 Ky. 727, 181 S.W. 368 (1916), where the defendant, having assigned his wages to the complaining witness, proceeded to collect them from his employer by falsely representing that there had been no assignment. Rejecting the argument that no false misrepresentation was made to the assignee, the court held that the false pretenses statute (also modeled after the English version)

does not require that the false statement should be made to any particular person or that it should be with the intention of committing a fraud upon the person to whom the statement was made. The offense is committed when the false statement is made, with the intention to commit a fraud, and money or property is thereby obtained.

. . . . .

The purpose of the statute is to punish the perpetrators of fraud committed through any false pretense. The gist of the offense is the successful misrepresentation, regardless of the person to whom it is made.

Id. at 733, 181 S.W. at 370. Accord, State v. McDonald, 534 S.W.2d 650 (Tenn.Sup.Ct.), cert. denied, 425 U.S. 955, 96 S.Ct. 1733, 48 L.Ed.2d 200 (1976) (misrepresentation to government official that clear and unencumbered title existed to automobile, thereby defrauding credit union); Commonwealth v. Kiernan, 348 Mass. 29, 201 N.E.2d 504 (1964), cert. denied, sub nom. Gordon v. Massachusetts, 380 U.S. 913, 85 S.Ct. 901, 13 L.Ed.2d 800 (1965) (defendant-construction engineer misrepresents completion of certain work to parking authority which thereupon authorizes bank trustee to make payment); State v. Hargrave, 103 N.C. 328, 9 S.E. 406 (1889) (defendant misrepresented to county clerk that he had not assigned witness fee); Mack v. State, 63 Ala. 138 (1879) (defendant misrepresents to A, who has B‘s musical instruments, that he was sent by B to retrieve the instruments); Commonwealth v. Call, 38 Mass. (21 Pick) 515 (1839) (defendant falsely represents to debtor that he is authorized to collect for creditor).[13]

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V
Against this background, we may now consider whethe Foster v. Goldsoll, 48 App.D.C. 505 (1919), departed from the mainstream by placing fraud by proxy outside of the District’s false pretenses law. Bearing in mind that Judge Robb, who authored the opinion in Foster, also wrote the earlier opinion in Robinson, which read the statute to reach misrepresentation “by the defendant or someone acting for and instigated by him”, this departure urged by the defendant must be entertained with initial skepticism. In Foster, the French government sought Goldsoll’s extradition under a treaty which required that the asserted criminal charge constitute a crime under the law of the District of Columbia, i. e., the false pretenses statute. The record showed that Pierce-Arrow Company had been unsuccessful in its efforts to sell trucks to the French government. Goldsoll was alleged to have represented to Pierce-Arrow’s agent that (1) he was in a position to control orders placed by the French War Department for American trucks and (2) Pierce-Arrow would therefore have to deal with him in order to secure orders. Pierce-Arrow thereupon engaged Goldsoll and paid him a commission for the many trucks which it thereafter sold to France. France claimed that the representations to Pierce-Arrow were false, that Pierce-Arrow could have obtained orders without Goldsoll’s intercession, and that the price to France was greater than it would have been without Goldsoll’s commission.

On appeal, it was stated, “There is no evidence that Goldsoll made any representations whatever to [the Pierce-Arrow agent], or to anyone else.” Id. at 531. However, even assuming a misrepresentation, the result would be no different:

If anyone was deceived, it was the Pierce-Arrow Company, and not the French Republic; for the commissions paid Goldsoll’s firm in New York were not paid by that Republic, but by the company from money of which the company had absolute ownership. The theory of the prosecution is that . . . exactly the same number of trucks would have been purchased by the French government had the Goldsoll agency not intervened. It logically follows that no deception was practiced upon that government. It wanted Pierce-Arrow trucks, and it got what it wanted, at an agreed price.

Id. at 534 (emphasis added).[14] The critical language which generated the misunderstanding of Foster’s holding then follows:

The contention here is that the alleged false pretenses were made to the Pierce-Arrow Company, and that the money was obtained “from the government of the Republic of France.” The payments by France not having been induced by the false pretenses, the most essential element of the crime of false pretenses is lacking.

Id. at 535.

By stating that France’s “payments” were “not . . . induced by the false pretenses” to Pierce-Arrow, the court turned the case upon the absence of the critical element (as laid down i Robinson) of “reliance on the pretense or representation by the person defrauded. . . .”[15] The fact, of course, was that France was ignorant of Goldsoll’s claimed representation to Pierce-Arrow (that orders from France could only be gotten through Goldsoll). Reliance, therefore, was an impossibility.

Foster cannot stand for the proposition that the statute is not violated where false representations are communicated to a third person with the intent that they be

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passed on to the victim who then, as the defendant originally contemplated, proceeds to rely upon the reiterated deceit Foster is a simple case of proximate cause expressed through reliance. In the language of The Queen v. Brown, supra at 352, Goldsoll’s alleged fraud was never shown to have “operated on the mind” of the French government.

It is clear the defendant cannot find refuge i Foster. The evidence here establishes beyond peradventure that the defendant made the false representations to Ruiz knowing that he was counseling Ms. Blair. The defendant intended that his misrepresentations influence Ruiz so that he would repeat the deceits to Blair and recommend that she sign the promissory note. Ruiz was the defendant’s mouthpiece, an innocent alter ego through which the defendant perpetrated the fraud upon Blair. This is not a case of Blair being ignorant of defendant’s representations. They were repeated to her just as the defendant intended; they shaped (1) Ruiz’s advice that she sign the promissory note and (2) her decision to do so. The fraud was effected just as though the defendant were physically present. He cannot so easily escape the prohibition of the false pretenses statute by the artful use of an intermediary.

The statute lays its proscription upon anyone who “by any false pretense, with intent to defraud, . . . procures . . the signature of any person, as maker . . to or upon any . . . promissory note. . . .” It does not by its terms require privity of utterance. Foster did not gratuitously add such a gloss. To insinuate that gloss into the statute would create a loophole that would completely undermine it by the simple expedient of perpetrating the offense through an innocent intermediary.

Lord Kenyon’s words retain their persuasiveness to this court. The false pretenses statute is “auxiliary to the law of morality. I do not feel an inclination to explain it away.”Young v. The King, 3 T.R. 98, 102 (1789), quoted in Jones v. United States, supra at 653-54.[16]