Summons v. State

Parke, J., delivered the opinion of the Court. David H. Summons was indicted in Carroll County on two counts which charged him with the crimes of false pre ³⁸⁴ tenses and of a conspiracy to defraud. He was tried before the court, sitting as a jury; acquitted of a conspiracy to defraud, but convicted of the charge of false pretense; and sentenced to the penitentiary for the period of five years. The appeal is from that judgment.

The traverser has advisedly abandoned his demurrer to the indictment, and the questions on this appeal are exceptions to the rulings on the evidence. Code, art. 27, sees. 555, 558; Carnell v. State, 85 Md. 1 ; State v. Blizzard, 70 Md. 387 . The traverser did not testify; but the State had offered evidence tending to prove that the traverser was in Carroll County for the purpose of selling the common stock of the Summons Finance Corporation, a Delaware corporation, and that he obtained the sum of $5,000 from the prosecuting witness, Gr. Harry Bevard, by a sale to him of one thousand shares of the stock at five dollars a share by means of these false representations: 1.

That the traverser had sold $2,500 worth of this stock to Ivan L. Hoff, Esq. 2. That the stock he had for sale was the stock of the Summons Finance Corporation, and that all the proceeds of sale of the stcok he was selling were being paid over to the corporation in full. 3. That the traverser kept on deposit in the Summons Finance Corporation a large sum of money to pay all dissatisfied stockholders who wished a return of their money. In the course of this proof, twenty-one exceptions to the rulings on the evidence were taken.

The prosecuting witness testified that he had “subscribed for some of the stock and paid the traverser $100 on account and agreed to take the $5,000 in stock later on.” The position of the defence is that this testimony established a binding contract, and that any subsequent representation made by the traverser was inadmissible, on the disputable theory that it is not within the statute to induce a person by false pretenses to do an act which be is legally bound to do, nor to obtain by false pretenses property which the accused has a perfect and complete legal right to receive. Commonwealth ³⁸⁵ v. Harkins, 128 Mass. 78 ; Commonwealth v. McDuffy, 126 Mass. 467 . But see 25 C. J., see. 38, p. 610. Accordingly, as the evidence on the part of the State was that, at the time the prosecuting witness asserted he had subscribed for some of the stock and paid $100 on account and agreed to take the $5,000 in stock later on, no misrepresentation had then been made to him by the traverser that the latter had sold $2,500 worth of this stock to Ivan L. Hoff, Esq., the traverser objected to the admissibility of any later misrepresentation to this effect.

However, by its very terms, the rule invoked does not apply because, even if there had been a contract of sale, the prosecuting witness was not legally bound to pay, nor had the traverser any legal right to receive, the remaining sum of $4,900 on account of the purchase of the stock, since the contract relied upon by the traverser was unenforceable because of its having been induced by the false pretenses set out in the second and third paragraphs of the bill of particulars, and the applicability here of the' rule relied upon depends upon a pre-existing valid contract. Where a party has been induced by false pretenses to enter into a contract, the party who has so procured the party’s agreement to the contract cannot have excluded the evidence of his subsequent misrepresentations, whereby he completes the original fraud upon his victim by securing the full fruit of the fraud. In the instant case, the prosecuting witness had informed the traverser that he would not take the remaining stock, and it was to induce him to do so, and pay to the traverser the sum of $4,900, that the traverser falsely represented to the prosecuting witness that Ivan L. Hoff, Esq., of Westminster, an attorney at law, had bought stock to the extent of $2,500. The first exception is intended to test the correctness of the court’s action in admitting this testimony.

As will be seen, the exception did not present the question, but it was important, and has been argued; so, treating it as sufficiently reserved, we find there would have been no error in the admission of this testimony. Returning now to the precise question raised, we find, after ³⁸⁶ the prosecuting witness had stated that he had sold to Mr. Hoff $2,500 worth of the stock, and then the witness said: “I thought to myself, if he sold to Mr. Hoff — ” when he was interrupted by an objection, and a motion was made to strike out “what he thought.” The court then refused to strike out the answer, and an exception was taken. It is plain that the witness had not gone far enough to injure the traverser, but later on, without the renewal of the objection, he stated, in substance, that it was this misrepresentation that induced him to take the stock and pay $4,900 to the traverser. Eor the reasons already assigned, and because the issue in this case was whether the party was deceived by the false pretence, and was induced to part with his property because of such deception, however credulous or careless he may have been in accepting the prisoner’s statement, the evidence was admissible.

Reg. v. Woolley, 1 Denison, 559; Reg. v. Giles, Le. & Ca. 502; Jules v. State, 85 Md. 305, 314 . Many of the rulings present no question for discussion. The second and third exceptions were taken to merely preliminary questions; the fourth exception was to an unanswered question; the twenty-first exception was taken too late; the evidence admitted on the fifth, tenth and seventeenth exceptions was not prejudicial; and that given under the sixth, seventh, thirteenth, fourteenth, fifteenth and twentieth exceptions was relevant and material. This leaves for consideration the eighth, ninth, eleventh, twelfth, sixteenth and eighteenth exceptions.

Ernest E. Weaver, a stockholder in the company, a director, and its treasurer during a term which included the period from July to December 31st, 1921, was chairman of a committee of investigation recommended by the stockholders and appointed by the directors. As chairman of that committee he examined and investigated the