People v. Bagwell

• Decision Date: 10 December 1940
• Docket Number: No. 124.,124.
• Citation: 295 Mich. 412,295 N.W. 207
• Parties: PEOPLE v. BAGWELL.
• Court: Michigan Supreme Court

295 Mich. 412

295 N.W. 207

PEOPLE

v.BAGWELL.

No. 124.

Supreme Court of Michigan.

Dec. 10, 1940.

Cline Bagwell was convicted of an offense under an information charging that defendant, with intent to defraud, obtained money and stock from victim by fraudulently representing to victim that a net income of $1 per month was being earned by each 1/7500ths interest in certain oil lease interests owned by a corporation, of which defendant was president, and he appeals.

Affirmed.Appeal from Circuit Court, Bay County; James L. McCormick, judge.

Argued before the Entire Bench.

Hubert J. Gaffney, of Bay City, for appellant.

Thomas Read, Atty. Gen., Edmund Shepherd, Asst. Atty. Gen., and Karl K. Leibrand, Pros. Atty., of Bay City, for appellee.

SHARPE, Justice.

Defendant was found guilty by a jury in the circuit court for the county of Bay upon an information charging that Cline Bagwell ‘On the 8th day of April in the year one thousand nine hundred thirty-six at the city of Bay City in said county, did with intent to defraud, obtain from Cora Brown nine hundred ($900.00) dollars in checks and currency and forty-two (42) shares of preferred stock in the Consumers Power Company, of the value of forty-two hundred ($4200.00) dollars by falsely and fraudulently representing to Cora Brown that a net income of one ($1.00) per month was being and had been earned by each one seventy-five hundredths (1/7500ths), interest in the following described oil lease interests owned by Michigan Producers & Refiners, Inc., to-wit: * * *.’

Defendant Bagwell was president and directing head of Michigan Producers & Refiners, Inc. It is conceded that the sole responsibility for all of the operations of Michigan Producers & Refiners, Inc., was Mr. Bagwell's and he assumed full responsibility for all its operations. Therefore, its operations hereinafter will be referred to as Bagwell's operations.

Defendant Bagwell commenced the oil operation in question in 1933 and by 1936 he was the owner of working interests in the four blocks of leases described in the information. Defendant was not the complete owner of all of these leasehold interests, there being some outstanding working interests and overriding royalties.

The complaining witness, Cora Brown Camp, operated a grocery store in Bay City. She had no experience in the oil business. She was the owner of 37 shares of Consumers Power Company stock of the par value of $100 per share. She was also the joint owner with her mother of six shares of Consumers Power Company stock. About April 1, 1936, a Mr. Moore called upon complaining witness, stating that her mother desired to exchange the six jointly owned shares of Consumers Power Company stock for an interest in defendant's block of leases. Mr. Moore was a salesman in the employ of defendant and was employed to sell these units. As a result of this call by Mr. Moore, the complaining witness joined with her mother in signing over the jointly owned shares of Consumers Power Company stock to defendant for an assignment to her and her mother of a 6/7500ths interest in defendant'soil leases. Following the delivery of this assignment of interest in the oil leases, Mr. Moore continued to call upon Mrs. Brown Camp in an effort to sell her additional interest in the oil leases.

On or about April 25, 1936, Mr. Moore delivered to her a check for $6 signed by defendant as dividend for that month on the six units. About this time, Mrs. Brown Camp purchased individually a 20/7500ths interest in the leases through Mr. Moore and paid for the same by giving defendant 20 shares of Consumers Power Company stock. About one month later, Mrs. Brown Camp was paid $26 as the dividend for the 20 units owned by her individually and the six units owned jointly.

During the months of May, June, and the early part of July, 1936, Mr. Moore continued to urge Mrs. Brown Camp to purchase more oil interests. Some time during the month of July, Mr. Moore took Mrs. Camp to see defendant Bagwell and after discussing her investment with defendant, she purchased 17 additional units and paid for them with 17 shares of Consumers Power Company stock. For the month of July, Moore turned over to her dividends in the amount of $43. In August, 1936, Moore sold Mrs. Brown Camp eight additional units which were paid for by check, and for this month she received defendant's check for $51 as the dividends upon the 45 individual units and the six jointly owned units.

Mrs. Brown Camp continued to receive dividends from defendant at $1 per unit per month receiving the last one on the six jointly owned units in December, 1936, and on the 45 individual units in March, 1937. The only dividend received by Mrs. Brown Camp after this date was a 50 cent. per unit dividend paid by the Michi-Oil, Incorporated (successor to defendant) in February, 1938. It is conceded that the oil wells never earned a dividend of $1 per month per unit.

Defendant appeals from the conviction and urges that his representation was that his company had been and was paying unit holders at the rate of $1 per month per unit; that such representation was true; and that the admission of testimony of statements made by Moore not in the presence of defendant was improper and prejudicial to his interests.

The people claim that defendant, in order to induce Mrs. Brown Camp to invest, represented to her that the oil units in the past had earned or yielded a return of $1 per unit per month and that they were at the time of the investment earning or yielding this amount; and that there was sufficient evidence of a conspiracy between defendant and Moore with relation to this transaction, or sufficient evidence of agency, to warrant the trial court in admitting testimony of Moore's statements not made in the presence of defendant.

The information in this case was filed under Act No. 328, Pub.Acts 1931, § 218 (Stat.Ann. § 28.415). Under this statute, the elements of the offence consist of a false representation as to a past or existing fact made with intent to defraud and resulting in the accomplished fraud.

A part of the testimony relied upon by the people to sustain the charge made in the information is found in the testimony of Mrs. Brown Camp:

‘Q. Whether or not you ever had any contact with Mr. Bagwell personally in regard to these oil units? A. I had all may dealings with Mr. Moore. I met Mr. Bagwell at one time when I went up to his office. Mr. Moore took me up there to meet him personally up there, was the first time.

‘Q. When did you go to Mr. Bagwell's office—about what date? A. The first week in July, I think.

‘Q. In 1936? A. Yes.

‘Q. And you say you were invited up there by Mr. Moore? A. Yes.

‘Q. When you got there to the office was Mr. Bagwell there? A. No, he was not.

‘Q. Did you meet Mr. Bagwell in the office that afternoon? A. Yes, he came in while Mr. Moore was showing me a map that had little tacks put in where the oil wells were, and he was showing that to me when Mr. Bagwell came in, and that is when I met Mr. Bagwell the first time. Mr. Moore introduced me to Mr. Bagwell.

‘Q. What was said just at the time of the introduction? A. Well, he told Mr. Bagwell that I had been investing some of my stock in some of the oil well stock, and that I had some more stock to invest and I was hesitating, and Mr. Bagwell said: ‘Why don't you come in with us,’ he said, ‘I don't know of any proposition that is any better than this to invest anybody's money,’ that he didn't know of any proposition where they paid one per cent a month.

‘Q. Whether or not anything was said at that time as...