Com. v. Grife

• Decision Date: 14 August 1995
• Citation: 444 Pa.Super. 362,664 A.2d 116
• Parties: COMMONWEALTH of Pennsylvania v. Barry GRIFE, Appellant.
• Court: Pennsylvania Superior Court

Page 116

664 A.2d 116

444 Pa.Super. 362

COMMONWEALTH of Pennsylvania v. Barry GRIFE, Appellant.

Superior Court of Pennsylvania.

Submitted Jan. 23, 1995.

Filed Aug. 14, 1995.

John W. Packel, Assistant Public Defender, Philadelphia, for appellant.

Kathy L. Echternach, Assistant District Attorney, Philadelphia, for Commonwealth, appellee.

Before OLSZEWSKI, JOHNSON and BROSKY, JJ.

OLSZEWSKI, Judge:

Following a bench trial, Barry Grife was convicted of one count of attempted theft by deception, ¹ and three counts of theft by deception. ² Post-verdict motions were denied, and Grife was sentenced to three concurrent five-year terms of probation and ordered to pay restitution in the amount of $9,100 to the complainant, the Honorable Alan Silberstein.

Grife, a real estate broker, appraiser, and title insurance agent in the Philadelphia area, borrowed $10,000 from Shoppers Publication, Inc. (Shoppers). This loan was to be secured by a mortgage of $11,800 granted to Shoppers on Grife's home at 43 Merrydell Drive, Northampton, Bucks County. Previously, Grife had executed a $20,000 mortgage on the same home to his mother, Bessie Grife (mother).

Shoppers recorded its mortgage September 19, 1986. At the time of the first loan, Grife presented Shoppers with a satisfaction of the mortgage to mother. Between August of 1986 and January of 1987, Shoppers loaned Grife additional moneys. In exchange, Grife executed a second mortgage, for $35,000, to Shoppers on his Northampton home. During this period of time, Grife continued to make payments on the first Shoppers loan.

In October of 1986, after the first Shoppers mortgage was recorded but before the second was executed, Grife took another mortgage out on the same Northampton residence, this time with Northwood Federal Credit Union (Northwood). Grife borrowed $100,000 from Northwood. In 1984, Grife had granted Northwood a $35,000 mortgage on the home, which was satisfied from the proceeds of the second Northwood loan.

Northwood allowed Grife to conduct the title search as title agent to his own loan. Grife was part owner of a title insurance business, the Delaware Valley Abstract Company. Grife had represented to the board at Northwood that he would save transactional costs by doing his own title search. N.T. 7/12/93 vol. 1 at 61. While he agreed to subordinate mother's mortgage to Northwood's interest, Grife failed to report Shoppers' $11,800 lien. Id. at 63-64. Northwood was thus unaware that it was second in line behind the Shoppers mortgage.

Three months after executing the Northwood mortgage, Grife negotiated the second mortgage with Shoppers. Two months after that, on March 12, 1987, Grife took out yet another mortgage, this time with First Financial Corporation (Financial), for the sum of $56,277. Once again, and allegedly for the same reasons as before, Grife acted as his own title agent. N.T. 7/12/93 vol. 2 at 24. An affidavit was prepared for Financial's benefit stating that the Northampton home was free and clear of all loans, taxes, liens, mortgages and judgments, except for the $100,000 mortgage to Northwood. Id. at 25-26. A title commitment showed mother's and Shoppers' mortgages as removed. Id. at 28-30. The result was that Financial believed its mortgage interest in the property was second only to Northwood's. Id. at 30. ³

Six days later, on March 18th, Grife paid off the $35,000 and the $11,800 loans from Shoppers. He received from Shoppers the satisfaction pieces for both the second mortgage and the mortgage to mother. Id. at 30, 33. Because Grife was planning to borrow more money from Shoppers, no satisfaction piece was sent for the first $11,800 Shoppers mortgage. Instead, Grife used this mortgage to secure an additional $5,000 loan from Shoppers. Id. at 28.

At this point, therefore, Grife had an $11,800 mortgage to Shoppers, a $100,000 mortgage to Northwood, a subordinated $20,000 mortgage to mother with a satisfaction piece that was never entered, and a $56,277 Financial mortgage. As if this were not enough, Grife solicited his business partner in the title insurance agency, attorney Ronald Bayer, for more money.

Bayer, in turn, spoke to his former law partner, the Honorable Alan Silberstein, President Judge of the Philadelphia Municipal Court, about lending Grife $10,000. Judge Silberstein lent Grife the money at 12% simple interest, interest to be paid in twelve equal monthly installments, principal to be paid in full one year from the date of the loan. In exchange, Grife gave Judge Silberstein a $10,000 mortgage on the house. N.T. 7/13/93 at 85.

Based upon letters and documents supplied to Judge Silberstein by Grife, the judge believed that his mortgage was in third place, behind the Northwood and Financial mortgages in priority. Id. When Grife sent Bayer the results of a title search, marginal notations listed the $11,800 Shoppers mortgage as removed and mother's mortgage as being removed. Id. at 20.

Grife made most, if not all, of the interest payments to Judge Silberstein. Id. at 88. Grife approached Judge Silberstein for a second loan. This time, however, because the judge was concerned about the amount of equity in the house and because he was not satisfied with the timeliness of Grife's payments, Judge Silberstein refused to make a second loan. Id. at 89.

After being turned down by Judge Silberstein, Grife sought out another friend, David Ghen, to lend him the money. With Grife present, mother assigned her $20,000 mortgage to Ghen in exchange for $10,000. N.T. 9/23/92 at 12. Soon afterward, Grife went into bankruptcy. Northwood foreclosed on the Northampton house. Shoppers assigned its $11,800 mortgage to a title insurance company, Title U.S.A., in exchange for $2,500. N.T. 7/12/93 vol. 2 at 80-82. At foreclosure, Northwood received $132,000, while Ghen assigned his $20,000 mother mortgage to Title U.S.A. in consideration for $14,600. N.T. 7/12/93 vol. 1 at 78; N.T. 9/23/92 at 18. Judge Silberstein never collected any of the principal of his loan to Grife. Subsequently, Grife was prosecuted and convicted of theft by deception.

On appeal, Grife argues that the evidence was insufficient to convict him. We disagree.

"It is well established that the test for determining the sufficiency of the evidence is 'whether, viewing all of the evidence admitted at trial, together with all reasonable inferences therefrom, in the light most favorable to the Commonwealth as verdict winner, the trier of fact could have found that the defendant's guilt is established beyond a reasonable doubt.' " Commonwealth v. Rainey, 540 Pa. 220, 656 A.2d 1326, 1330 (quoting Commonwealth v. Holcomb, 508 Pa. 425, 498 A.2d 833 (1985), cert. denied, 475 U.S. 1150, 106 S.Ct. 1804, 90 L.Ed.2d 349 (1986)).

There is no doubt that Grife misrepresented the mortgages he took out on the Northampton home in order to procure further loans. Both orally and in writing, he actively concealed the $11,800 Shoppers mortgage to all of the subsequent lenders. That he initially satisfied this mortgage is irrelevant, as he used that same mortgage to secure a subsequent loan. In addition, he never recorded the satisfaction of the mortgage to mother, despite representing to Northwood, Financial, and Judge Silberstein that mother's mortgage was being removed. It was after he misrepresented the status of mother's mortgage that Grife colluded to have it assigned to Ghen, a bona fide purchaser.

The statute under which Grife was convicted provides in part: "A person is guilty of theft [by deception] if he intentionally obtains or withholds property of another by deception." 18 Pa.C.S.A. § 3922(a). An element of theft by deception is that Grife intended to deprive the lenders of their property. See Commonwealth v. Bruce, 414 Pa.Super. 419, 607 A.2d 294 (1992). Grife maintains that the Commonwealth has failed to establish this element of the crime, because it did not prove beyond a reasonable doubt that Grife intended to deprive the lenders of their money.

We agree that some attempt was made by Grife to pay off some of the loans. He paid off the second Shoppers mortgage. By Judge Silberstein's own admission, Grife paid off most of the interest on the Silberstein loan according to the terms of that loan.

The gravamen of the crime of theft by deception, however, is the fraudulent taking of the property of others. That Grife might have had plans to pay the creditors back is of no moment. ⁴ What Grife did was put the property entrusted to him by the lenders significantly more at risk than the mortgagees realized. When a borrower places the property of another at risk of destruction or loss, and this risk is unknown to the lender because of an intentional misrepresentation of the borrower, the borrower has committed theft by deception by defrauding the lender.

We are persuaded by the reasoning of the Maryland Court of Special Appeals, which noted the following:

One who is asked to lend money or to sell goods on credit has a right to determine for himself whether he chooses to be a secured creditor or an unsecured creditor, and if he chooses to be the former he has a right to know about the security. One who has extended credit in reliance upon a mortgage on real estate which is falsely represented to be a first mortgage when in fact it is subject to a prior recorded mortgage for more than the land is worth, or is a mortgage upon property which the mortgagor does not own, has been defrauded, even if the debtor has an intent to pay the debt. The lender intended to be a secured creditor but by reason of the false representation his position is for all practical purposes that of an unsecured creditor. There is an obvious and unreasonable risk of loss which has been forced upon him, without his knowledge or consent, by reason of the deceit. This risk which the creditor did not intend to assume was imposed upon him by the intentional act of the debtor, and this amounts to an intent to...