State v. Sinclair & Sinwellan Corp.

O’Donnell, J., delivered the opinion of the Court. In December 1972 the appellee Sinwellan Corp. (Sinwellan) employed Franz Hoogland as the general manager of the Great Oak Lodge operated by it near Chestertown, at a salary of $22,500 per year, payable monthly. On May 7, 1973 the appellee, Philippe A. Sinclair (Sinclair), by check No. 699 drawn upon the Peoples Bank of Elkton and countersigned by Mrs. Rena Matthews, office manager for Sinwellan, issued a corporation check to Hoogland in the amount of $977.50 in payment of the net wages due him for the month of April. When Hoogland deposited the check in his account in the Peoples Bank of Chestertown on May 10, 1973 it was returned to him as dishonored on presentment by reason of being drawn against “uncollected funds,” i.e. certain checks had been deposited by Sinwellan to cover checks drawn upon its account but because the deposited checks had not yet “cleared” the bank refused to honor it.

Apparently this check was never redeposited and Hoogland conceded it was not left “for collection.” On the afternoon of May 20, 1973, following an argument with Sinclair, Hoogland’s services were terminated for certain alleged derelictions. On May 21st another check, No. 804, was similarly issued to Hoogland in the amount of $866.76 representing, upon severance, payment for the services rendered by him during the first 20 days in May. When Hoogland presented the second check, on May 22, 1973, at the Peoples. Bank of Elkton for payment he was there informed that the check could not be paid because “we do not have the money here,” or “there were uncollected funds in the account.” When the check was returned to ⁶⁴⁸ Hoogland the cashier affixed a slip to it indicating that it was “returned unpaid” due to “uncollected funds.” Similarly, this second check was never redeposited or left with the bank for collection.

Later that same day Sinclair caused a telegram to be sent on behalf of Sinwellan advising Hoogland, at his residence then in Lodi, New Jersey, that “Inventory shortages have become substantial enough to warrant previous [sic] action on our part. Payment stopped on checks 699 and 804 pending completed inventory.” As a result of the dishonor of both checks the State’s Attorney for Kent County on August 29, 1973 filed a criminal information (No. 2136) 1 charging Sinclair and Sinwellan, 2 alternately and separately, with violation of Maryland Code (1957, 1971 Repl. Vol. [1974 Cum. Supp.]) Art. 27, § 140 (with obtaining from F. L. Hoogland, by false pretenses, “services” — “of the goods, chattels, moneys and properties” of Hoogland “with intent to defraud”), and of Art. 27, § 144 (with obtaining “goods and services” from.

Hoogland by means of a check with intent, at the time of giving such check, to stop payment). 3 During the course of a jury trial on October 9,1973, in the Circuit Court for Kent County, presided over by Judge James A. Wise, motions for judgments of acquittal made at the close of the evidence presented by the State on behalf of each of the defendants were granted, pursuant to Maryland Rule 755 b, as to each of the counts which charged them with the crime of false pretenses in violation of Art. 27, § 140. By its verdict the jury acquitted both Sinclair and Sinwellan on both the remaining counts (counts one and two) arising from the issuance of check No. 699 on May 7, 1973, but returned guilty verdicts as to each of the appellees for a violation of Art. 27, § 144, with respect to check No. 804, issued on May ⁶⁴⁹ 21, 1973. 4 Following the denial of motions for new trial and from the judgments entered 5 upon the guilty verdicts, Sinclair and Sinwellan seasonably appealed to the Court of Special Appeals. That court, in Sinclair & Sinwellan Corp. v. State, 21 Md. App. 477 , 319 A. 2d 549 (1974), 6 in reversing the convictions, after first observing that “the mischief the statute seeks to remedy is the wrongful obtention of something of value with a negotiable instrument issued by one, who at the time of issuance, intends to stop payment,” pointed out that “it is implicit that, within the aegis of the crime created by § 144, the dishonor or disregard of the instrument by the drawee must have as its cause a stop order or countermand before the presumption [of intent to defraud] may be used against the maker,” and that “[i]f the dishonor or disregard by drawee is the result of any other cause, no presumption arises that at the time of issuance the maker intended to stop or countermand payment.” ( 21 Md. App. at 479 , 319 A. 2d at 550 ). That court found that the record indicated “conclusively that the check described in the information was dishonored or disregarded for ‘uncollected funds’ ” and that, even though the cashier at the drawee bank had subsequently received a stop payment on the check, his testimony nevertheless clearly indicated that “the cause of dishonor or disregard of the check . . . was not the stop order or countermand,” so that “[a]s a consequence, the presumption [of an intent to cheat and defraud] was not available to relate the intent to countermand back to the initial issuance of the check” — without which presumption “the evidence was not sufficient to permit the case to go to the jury.” ⁶⁵⁰ It was in this posture of the case that we granted the petition of the Attorney General to issue a writ of certiorari.

We shall affirm the result reached by the Court of Special Appeals, but on a more fundamental premise — the inapplicability of the provisions of Art. 27, § 144, to the facts in the case, since the issue was preserved for our review by the appellees’ renewed motions for judgments of acquittal under Maryland Rule 755 b, made at the close of all the evidence. That statute, in pertinent part, provides as follows: “Every person who shall obtain money, credit, goods, wares or anything of value, of the value of one hundred dollars or more, from another by means of a check, draft or any other negotiable instrument of any kind, with intent at the time of giving such instrument without the consent of such other to stop or countermand the payment of the same or otherwise to cause the drawee thereof to disregard or dishonor or refuse to recognize such instrument, shall be deemed to have obtained such money, credit, goods, wares, or other thing of value with intent to cheat and defraud another and upon conviction, shall be fined or imprisoned or both, as provided in § 140 of this article, at the discretion of the court. . . . And upon the trial of any person accused of violation of this section, the fact that such person without the consent of such other to stop or countermand the countermanded payment of such instrument, or otherwise caused the drawee to disregard or dishonor the same without returning or tendering the return of the thing so obtained shall be presumptive evidence of such intent to cheat and defraud. . . .” (Emphasis supplied.) When what is now § 144 was initially enacted by the General Assembly by Ch. 605 of the Acts of 1920 — in substantially the same form as now provided, as to the gravamen of the offense — it complemented what has come to be known as the Worthless Check Act, originally enacted ⁶⁵¹ by Ch. 281 of the Acts of 1914 and now codified as Art. 27, § 142. The Worthless Check Act “in substance provide[d] that money or other things therein named, obtained by the giving of a worthless check or other instrument, as therein stated, shall be deemed to have been obtained by means of false pretenses, where the same was done with the intention to cheat and defraud, and ‘the giving of the aforesaid worthless check, draft or negotiable instrument shall be prima facie evidence of intent to cheat or defraud,’ subject to the provision” that the drawer shall deposit with the drawee of such paper within ten days thereafter funds sufficient to meet the same.

Lyman v. State, 136 Md. 40, 49 , 109 A. 548, 552 (1920). As part of the legislative scheme Ch. 605 of the Acts of 1920 repealed and re-enacted in virtually identical language the provisions of the Worthless Check Act. Each of these sections, as enacted, related to the obtention of “money, credit, goods, wares or anything of value by means of a check, draft or any other negotiable instrument of any kind. . . .” Under each of these statutes, the issuance of the check, draft or negotiable instrument, under § 142 where the check was returned as worthless and under § 144 after stopping or countermanding payment, is considered to be presumptive evidence of an intent to cheat and defraud. Both statutes were enacted to supplement the provisions of the False Pretense Act, now codified as Art. 27, § 140, which proscribes the obtaining from any person, by any false pretense, “any chattel, money or valuable securities” with intent to defraud, and which was first enacted by Ch. 319 of the Acts of 1835.

In a prosecution under the False Pretense Act (§ 140) “the State has the burden of proving that there was ‘a representation of an existing fact made with intent to defraud, and that the operation of such representation as a deception induced a transfer and the obtaining of the money or property by the person committing the fraud to the loss of another.’ ” (Emphasis supplied.) Marr v. State, 227 Md. 510, 514-15 , 177 A. 2d 862, 864 (1962); Willis v. State, 205 Md. 118, 123-24 , 106 A. 2d 85, 87 (1954). ⁶⁵² “It was obviously because of the difficulty so frequently encountered in proving fraudulent intent [under the False Pretense Act] that the Legislature provided in the Worthless Check Act that the giving of a worthless check raises a prima fade presumption of an intent to defraud ....” Willis v. State, supra, 205 Md. at 124-25 , 106 A. 2d at 88 . Under both statutes, however, it is necessary that the evidence show that the victim actually relied upon the false representation. In Levy v. State, 225 Md. 201 , 170 A. 2d 216 (1961), Judge Henderson, for this Court, after pointing out that the offense of false pretenses under § 140 and the obtaining of money by bad check under § 142 are separate offenses, and an intent to defraud is a necessary ingredient under both, stated: “However, it seems to be well established that it is essential both in a charge of obtaining money by false pretenses and under the bad check act that the victim actually rely upon the false representation. See 22 Am.

Jur. False Pretenses § 25, and 2 Wharton, Criminal Law & Procedure (Anderson’s ed.), § 600. The rule th&treliance must be shown was stated by this Court in Kaufman v. State, 199 Md. 35, 40 , although actual reliance was found to exist in that case. See also Willis v. State, supra, at p. 127.” (Emphasis supplied.) 225 Md. at 206-07 , 170 A. 2d at 218 .

Although the Worthless Check Act, and what is now codified as Art. 27, § 144, initially included within the scope of each only “money, credit, goods, wares or anything of value,” the Worthless Check Act was subsequently amended to include “services, release from any debt or obligation for services, or for materials or labor in the construction or repair of any building or buildings, wares or anything of value.” 7 Article 27, § 144, however, as to the scope of the ⁶⁵³ property within its ambit remains unchanged from its initial enactment. Where statutes have been held to require proof that the victim parted with money or property in reliance upon the validity of the check tendered it has generally been held that there is no intent to defraud under such statutes if the check tendered is given in payment of a preexisting debt — since nothing in exchange for the worthless check has been obtained. See R. Anderson, 2 Wharton’s Criminal Law and Procedure, §§ 615-16 (1957). Professor Perkins, in his respected and oft quoted work on Criminal Law, in the chapter on “False Pretenses — Cheating by Check,” states: “Differences in the statutes permit little in the way of generalization.

At times a fraudulent check clause is included in the false pretense section itself (footnote omitted), but more frequently it is separate (footnote omitted). If the statute speaks only in terms of money, property or thing of value obtained by such a check it is not violated if nothing was obtained (Currlin v. State, 110 Tex.Cr.R. 18 , 6 S.W.2d 767 (1928); Lochner v. State, 218 Wis. 472 , 261 N.W. 227 (1935). Cf. Wis.Stats. § 343.41 (1953).), as for example where it is used to pay a pre-existing debt (Berry v. State, 153 Ga. 169 , 111 S.E. 669 (1922); Broadus v. State, 205 Miss. 147 , 38 So.2d 692 (1949).), or to pay an overdue note without taking up the note (Douglas v. State, 80 Ga.App. 761 , 57 S.E.2d 438 (1950).).” R. Perkins, Criminal Law at 317 (2d ed. 1969).

In accord see also Clark and Marshall, Crimes, at 825, n. 81 (6th ed. 1958).. Generally, under statutes prohibiting the obtention of “any money, goods or other property of value,” by means of a worthless check, with an intent to defraud, it is necessary that the property obtained pass as a direct result of the giving of the worthless check, and the payment of an existing obligation, or pre-existing debt, has been held not to ⁶⁵⁴ be within the proscription of such statutes. See Phillips v. State, 24 Ala. App. 456 , 136 So. 480 (1931) (where the check was given in payment for services rendered to the defendant in selling certain advertisements); State v. Harris, 136 So. 2d 633 (Fla. 1962) (where the check was given in part payment of an existing obligation); Berry v. State, 153 Ga. 169 , 111 S. E. 669 (1922) (where the check was given in payment of a loan made to pay a fine); Vasser v. Berry, 85 Ga.

App. 435 , 69 S.E.2d 701 (1952) (in a suit for malicious prosecution where the plaintiff had given the defendant a worthless check in payment of a pre-existing florist bill owed by her parents); People v. Cundiff, 16 Ill. App.3d 267 , 305 N.E.2d 735 (1973) (where the defendant purchased grain on March 28, 1972, gave the seller a check therefor on April 6th and requested him to hold the check until April 10th, which he did); State v. McLean, 216 La. 670 , 44 So. 2d 698 (1950) (where a check was issued three days after delivery of a cargo of bananas); Pollard v. State, Miss., 244 So. 2d 729 (1971) (where the defendant purchased three used cars on September 5, 1968 and requested the seller to hold the check until the following week); Jackson v. State, 251 Miss. 529 , 170 So. 2d 438 (1965) (where the defendant gave a check “as a bond” for performance of a contract to remove some buildings from a tract of land in order to clear it); Broadus v. State, 205 Miss. 147 , 38 So. 2d 692 (1949) (where a check was given after the defendant had completely removed and departed with some machinery); State v. Jarman, 84 Nev. 187 , 438 P. 2d 250 (1968) (where the check was given for a past-due grocery bill); Hoyt v. Hoffman, 82 Nev. 270 , 416 P. 2d 232 (1966) (where a check was given on an open account for meat which had been purchased at wholesale); Norman v. State, 170 Tex. Cr. 25, 338 S.W.2d 714 (1960) (where the check was given in payment of “motel