Commonwealth v. Anthony

Citation28 N.E.2d 542,306 Mass. 470
PartiesCOMMONWEALTH v. ANTHONY et al.
Decision Date08 July 1940
CourtUnited States State Supreme Judicial Court of Massachusetts

OPINION TEXT STARTS HERE

Exceptions from Superior Court, Suffolk County; Broadhurst, Judge.

H. Henry Anthony and William M. Forgrave were convicted for larceny and for conspiracy to steal, and they bring exceptions.

Exceptions sustained in part and overruled in part.E. O. Proctor and A. V. Sullivan, Asst. Attys. Gen., for the commonwealth.

T. B. Shea, of Boston, for defendants.

QUA, Justice.

These are nineteen indictments, some of which are for larceny, and some of which are for conspiracy to steal, against two partners, H. Henry Anthony and William M. Forgrave, who had been carrying on a general stockbrokerage business under the firm name Brown, Anthony and Company. Each defendant has filed a separate bill of exceptions. In each case the only question that has been argued in connection with either bill is whether there was any evidence warranting the finding of guilty.

For convenience the cases will be divided into three classes, which will be considered successively, although all statements as to evidence and as to permissible findings are applicable, so far as pertinent, to all the cases.

1. We begin with a single indictment in three counts, alleging respectively that the defendants did steal certain described certificates of stock, certain pieces of paper, and $36,786.25 in money, all alleged to be the property of Marguerite A. R. Holmes. The indictment concludes with the statement that the charges in all counts ‘are different descriptions of the same act.’ On this indictment Forgrave only was found guilty.

There was evidence tending to show these facts: In December, 1936, Forgrave told one Finn, an employee of the firm, that if Mrs. Holmes, who had been Finn's ‘customer,’ would put up her securities, then in the firm's possession for safe-keeping, as collateral so that they could borrow $20,000 on them Forgrave would give Mrs. Holmes four per cent interest. Finn asked Forgrave whether the loan was ‘absolutely safe,’ and Forgrave said it was. Finn then explained the proposition to Mrs. Holmes, telling her that ‘the securities would not be disturbed.’ On January 14, 1937, Finn brought Mrs. Holmes to Forgrave. Forgrave told her that the money was absolutely safe'; that ‘everything’ was absolutely safe and secure; that she need not worry; that her ‘securities would be kept intact.’ He gave Mrs. Holmes a firm check for $20,000, which she indorsed and turned back to him. He then gave her a note for $20,000 at four per cent interest, payable in one year, and signed: Wm. M. Forgrave. Partner Brown Anthony & Co. Later the check was credited to the account of the firm, and its amount was credited to Forgrave's ‘capital account’ in the firm of Brown Anthony & Co. On January 14, Mrs. Holmes also signed a ‘margin card,’ which it could be found turned her account with the firm from a ‘cash account’ into a ‘margin account’ and thus rendered her securities available to be pledged for loans of the firm. Commonwealth v. Hull, 296 Mass. 327, 331, 333, 5 N.E.2d 565. Mrs. Holmes never received her securities or their proceeds, although she demanded them. She testified that she understood she was giving authority to Brown, Anthony and Company to borrow on the securities, but did not think they would sell any, because Forgrave said the securities would be kept intact; that she understood Brown, Anthony and Company were the borrowers; that Finn told her that the note handed to her was a partnership note; that she looked at it at the time, but did not notice that it was signed by Forgrave as partner of Brown, Anthony and Company; that ‘it all didn't sink in’; that she was not aware of the usual firm signature; that she went into Forgrave's office; that ‘there was a conversation there that this margin card was perfectly safe’; and this conversation was between Forgrave and herself, with Finn present; that Finn said he could make * * * [her] extra money by signing the margin card’; that she said, ‘Now Mr. Forgrave, you know just what I have. I don't want to take any chances'; that he replied, ‘there were no chances to be taken’; that she said ‘That doesn't mean that you are going to sell my securities?’ and he answered, ‘Oh, no, we are just going to use them for collateral. We are not going to sell any. We are keeping your securities intact, just as they are. You can have them back any time.’ About that time Mrs. Holmes indorsed each of her stock certificates. These were afterwards pledged to banks as collateral for loans to the firm and most of them were sold by the banks to satisfy the loans.

Forgrave testified that the firm was to pay both interest and principal on the $20,000 note. It is difficult to reconcile his explanations of the form of the transaction. One of them was that the firm must first lend to Mrs. Holmes the $20,000 which she in turn immediately lent to him ‘for the use of the firm.’ He ‘assumed’ that Mrs. Holmes knew that the note was not a partnership note.

There was evidence that at the time of the Holmes transaction the firm of Brown, Anthony and Company was in declining circumstances, and that securities used as collateral for its obligations were not ‘safe’ and might not be kept ‘intact’ and were in serious danger of being sold and lost, and that Forgrave knew the condition of the firm. There was evidence that as early as August, 1936, Forgrave had been informed by an accountant that an audit showed that if the firm was pressed on all its commitments at one time, it would have difficulty in meeting its obligations. There was evidence that the net worth of the firm, exclusive of good will, as shown by the books as of January 1, 1937, was only about $7,000; that efforts were being made to get new money into the business; that there was discord between the partners; that the loss sustained in operation up to June 29 was $77,000; and that on the date last mentioned the firm made an assignment for the benefit of its creditors.

There was much evidence to the effect that Mrs. Holmes had indorsed the check and received the note immediately before the statements hereinbefore mentioned were made to her by Forgrave. But the judge was not obliged to take the view that the transaction was fully completed and the check and note finally delivered before the statements were made. From the testimony of Finn in connection with the nature of the statements themselves the judge could find that the transaction did not become a finality until after Forgrave's statements were made, and that these statements were made for the purpose and had the effect of removing the lingering doubt in Mrs. Holmes' mind and so resulted in pushingthe matter to a conclusion. Moreover, the judge could find that before Finn brought Mrs. Holmes in to sign the papers Forgrave had made, in answer to an inquiry by Finn, a false statement as to the safety of the proposed loan on Mrs. Holmes' securities with the expectation and intent that Finn should make a similar representation to Mrs. Holmes, and that in consequence Finn did represent to her that her ‘securities would not be disturbed.’

It could be found that these representations as to the financial condition of the firm and as to the safety of the securities were more than mere expressions of opinion or prophecies as to the future, and that they amounted to statements of present fact. They were made by a partner, presumably, and as could be found actually, familiar with the underlying facts upon which the solvency of the firm and hence the safety of the securities depended. The positive character of the statements themselves would tend to create an impression of assurance and certainty based upon knowledge of fact rather than upon opinion or judgment. It has been held in numerous cases that similar statements bearing upon a person's financial condition may be found to be statements of fact. Safford v. Grout, 120 Mass. 20;Morse v. Shaw, 124 Mass. 59;Homer v. Perkins, 124 Mass. 431, 26 Am.Rep. 677;Commonwealth v. Stevenson, 127 Mass. 446, 448;Andrews v. Jackson, 168 Mass. 266, 47 N.E. 412,37 L.R.A. 402, 60 Am.St.Rep. 390;Gurney v. Tenney, 197 Mass. 457, 84 N.E. 428;Commonwealth v. Riches, 219 Mass. 433, 439, 107 N.E. 371;Commonwealth v. Quinn, 222 Mass. 504, 513, 514, 111 N.E. 405;Commonwealth v. Carver, 224 Mass. 42, 112 N.E. 481. See Burns v. Dockray, 156 Mass. 135, 30 N.E. 551;People's Savings Bank v. James, 178 Mass. 322, 324, 325, 59 N.E. 807;Shine v. Dodge, 130 Me. 440, 445, 157 A. 318; Compare Deming v. Darling, 148 Mass. 504, 20 N.E. 107,2 L.R.A. 743.

The evidence as a whole warranted findings that Forgrave by means of intentionally false material representations as to the financial condition of the firm and the safety of Mrs. Holmes' securities obtained her certificates for the benefit of his firm and himself and permanently deprived her of them. From all the facts an inference could be drawn of the criminal intent necessary to complete the crime of larceny by false pretenses as embraced in G.L. (Ter.Ed.) c. 266, § 30. See G.L.(Ter.Ed.) c. 277, § 41. Commonwealth v. King, 202 Mass. 379, 88 N.E. 454;Commonwealth v. Orler, 252 Mass. 55, 59, 60, 63, 147 N.E. 548;Commonwealth v. Bannon, 254 Mass. 320, 323, 150 N.E. 7;Commonwealth v. Coshnear, 289 Mass. 516, 522, 194 N.E. 900, et seq. It is unnecessary to determine whether the evidence would have warranted a finding of a further false pretense that the note was a firm note.

2. We come next to five pairs of indictments in each of which pairs Forgrave and Anthony are jointly accused in one indictment of stealing (1) a stock certificate, (2) a piece of paper, and (3) money, all alleged to be the property of a named person who was a customer of the firm, the charges in all counts being alleged to be different descriptions of the same act, and in a second indictment of conspiring to steal the property, money, goods and chattels...

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