Berman v. State

Mason, J., delivered the opinion of the Court. The appellant, Irwin Berman, was convicted by a jury in the Circuit Court for Montgomery County of false pretenses (three counts). He was sentenced to three concurrent nine-month terms in the Montgomery County Detention Center with three months of each sentence suspended upon making restitution. In seeking a reversal of the judgments below, the appellant’s principal assignment of error is that the evidence was insufficient to support his convictions.

On January 1, 1973, Berman formed a corporation known as the Greatway Travel Ltd. of which he was president. The purpose of the company was to sell travel consultant franchises to individuals for a fee and to supply the consultants with training, publications and other materials necessary for them to sell all types of travel on behalf of ¹⁹⁵ Greatway. The consultants were required to execute a contract which specified in detail the services, materials and benefits they would receive. Initially Berman owned 90% of the stock of Greatway, but after transfers to other investors, his stock ownership diminished to 38%.

As a result of mismanagement, credit problems and the failure of certain investors to honor their monetary commitments, the financial condition of the company deteriorated, and as of December 30, 1973, Greatway had a net worth of zero. Notwithstanding its financial problems, the company continued its operations until May of 1974. In February and March of 1974, the complaining witnesses in this case, Charles Hull, Sylvia Weaver, and Koo Yuen, purchased travel consultant franchises from Greatway for a fee, but did not receive the services or benefits promised. As to the sufficiency of the evidence, Charles Hull testified that on February 14, 1974, as a result of answering a Greatway advertisement in the Washington Post, he was visited by Orville Kenneth Wright, a Greatway salesman. 1 Wright informed him he would make money as a consultant for Greatway and would receive, among other things, reduced airfares, a percentage of airfare commissions, lower hotel rates, and familiarization tours.

He was further informed that he would receive materials, publications and training to aid him in becoming an effective travel consultant. As a result of these representations, he signed the travel consultant agreement and paid Wright $295.00 with the balance to be paid in four monthly payments of $100.00 each. Sylvia Weaver also signed a travel consultant agreement in February of 1974 and paid Wright $695.00. Representations similar to those made to Hull were also made to Weaver before she signed the contract.

Another complaining witness, Koo Yuen, signed a travel ¹⁹⁶ consultant agreement in March of 1974 and paid $895.00. His testimony regarding the representations is as follows: Everything they said is strictly in the contract. The contract, the, copy they have, they let me read over and the details. At the time I read it, it was very reasonable and sounding and the promises they make is strictly a business deal where I pay a sum and get the benefits from the contract.

The travel consultant agreement which the complaining witnesses admit was explained to them, item by item, before they signed provides in pertinent part: 1. GREATWAY agrees to provide for the CONSULTANT: a. A complete travel agency service facility for booking all types of travel and related services. b. A training program to consist of: 1.

A comprehensive guide for travel consultants and other related miscellaneous sales aids, manuals and materials. 2. An initial two (2) day training program in CONSULTANT’S geographical area, which CONSULTANT agrees to attend. 3. A complete, continuous training program whereby GREATWAY TRAVEL will hold monthly seminars, and/or periodic meetings in CONSULTANT’S geographical area for a twelve month period. 4. Access to travel information during business hours, including toll free, or collect, telephone communications, and reasonable consultation services. 5.

Subscription to Travel Weekly and other trade publications. 6. Up to 5,000 Direct Mail “Business Getters”. ¹⁹⁷ 7. Subscription to monthly O.A.G. (Official Airline Guide). 8.

Subscription to Quarterly Master & Travel Index. c. Leads and inquiries in the [a particular geographical area], d. Commissions on all travel sold by CONSULTANT without restriction as to the area, equal to 50% of the standard travel agency commission, including commissions from IATA and ATC carriers. All commissions shall be payable during the calendar month following the month in which GREATWAY receives its commission on travel sold by CONSULTANT. e.

One trip to Majorca (per attached brochure) at GREATWAY’S expense, available ninety (90) days after initial training program is completed. The elements of the crime of false pretenses were enumerated by this Court in Polisher v. State, 11 Md. App. 555, 560 , 276 A. 2d 102, 104 (1971). [T]he crime is committed when a person: 1) by making a false representation of a past or existing fact; 2) with intent to defraud; and 3) knowledge of its falsity; 4) obtains any chattel, money or valuable security from another; 5) who relies on the false representation; 6) to his detriment. Of like import, see Smith v. State, 237 Md. 573 , 207 A. 2d 493 (1965); Andresen v. State, 24 Md. App. 128 , 331 A. 2d 78 , cert. denied, 274 Md. 725 , aff'd 427 U. S. 463 , 49 L.Ed. 2d 627 (1976). ¹⁹⁸ The statute under which the appellant was convicted, Article 27, § 140 of the Annotated Code of Maryland, in part provides: Any person who shall by any false pretense obtain from any other person any chattel, money or valuable security, with intent to defraud any person of the same, shall be guilty of a misdemeanor, . . . that a mere promise for future payment, though not intended to be performed, shall not be sufficient to authorize a coJiviction under this section. (Emphasis supplied).

Our review of the testimony of the complainants and the contents of the travel consultant agreement signed by them, clearly indicates that the representations of Greatway were not representations of a past or existing fact, but rather promises of future acts, w’hich, standing alone, do not violate the statute. The State, in its attempt to bring Greatway within the ambit of the statute, argues that Greatway’s representations to the complainants and those incorporated in the travel agreement implied that Greatway was a viable and bona fide travel agency with the capacity and ability to perform .as promised. That inasmuch as these promises were false, Greatway implicitly misrepresented an existing fact, i.e., its institutional status as a travel agency capable of performing , the services its salesmen promised and contracted to provide. As authority for its argument, the State relies solely on 2 Wharton’s Criminal Late ajid Procedure § 589 (Anderson ed. 1957) which states: The false representation must be as to a material fact or event,, existing or