State v. Woolsey
| Decision Date | 03 October 1927 |
| Docket Number | 6163. |
| Parties | STATE v. WOOLSEY et al. |
| Court | Montana Supreme Court |
Appeal from District Court, Missoula County; Asa L. Duncan, Judge.
G. V Woolsey and W. B. Stone were indicted, and the former convicted, for obtaining money by false representation and pretense, and defendant Woolsey appeals. Reversed and remanded, with directions.
P. E Geagan, of Butte, for appellant.
L. A Foot, Atty. Gen., and I. W. Choate, Asst. Atty. Gen., for the State.
By information G. V. Woolsey and W. B. Stone were charged jointly with the crime of obtaining money by false representation and pretense from one Cora M. Doll. Specifically, it was charged that between the 29th day of March, 1923, and the 2d day of July, 1923, they represented themselves, respectively, to be the secretary and agent of the Western Home Improvement Company, a corporation; represented that the corporation was incorporated for $500,000, the capital stock of which was paid up and divided into 10,000 shares of the par value of $50 each; that the company was a building and loan association and functioned as such; that the success of the company was based on first mortgages, that it operated along proved successful channels for loaning money on good securities, financing worthy enterprises, and constructing homes for sale on a monthly purchase plan, and that it provided annuities for old age; that they, the defendants, could sell to Cora M. Doll but a limited number of shares of stock in the company; that no single purchaser could hold to exceed 10 shares of $50 each, but that special concessions would be made to her and she would be allowed a greater amount; that by means of such representations they obtained from her the sum of $6,000; that she relied upon such representations and believed them to be true, and so relying paid her money to the defendants during the period of time stated; that such representations were false, and were known by the defendants to be false, in that the corporation was not a building and loan association and did not function in the same manner; that it did not have any money loaned on first mortgages; that its success was not based on first mortgage loans; that it had not financed any worthy enterprises and had not constructed any homes for sale on a monthly purchase or any other plan, and that it had not provided annuities for old age; that its capital stock was not paid up, and that, in truth and in fact, the corporation had no assets except a limited amount which had long prior thereto been consumed and used by the defendants for their operating and living expenses; and that the stock was worthless and to the defendants known to be such at the time of the sale thereof of which complaint is made; that the representations so made by the defendants were made knowingly and designedly and with intent in them to defraud Cora M. Doll out of such money; and that they did so defraud and cheat her. Upon his plea of not guilty, the defendant G. V. Woolsey was separately tried on the information to a jury, which returned a verdict finding him "guilty as charged in the information, and that he obtained from Mrs. Cora M. Doll by means of false representation and pretense the sum of $2,500." By its further verdict the punishment of the defendant was left to the court. The court imposed sentence that the defendant be imprisoned in the state prison for not less than 4 nor more than 8 years, and judgment was entered accordingly. The defendant made motion for a new trial, which was denied, and the case is now before us on appeal from the judgment.
Many alleged errors committed at the trial are assigned by the defendant, and a voluminous brief has been filed by his learned counsel. In disposition of the appeal, however, it is necessary to consider only one of the several questions presented; namely, is the evidence sufficient to sustain the verdict?
Upon the trial, at the conclusion of the state's case, the defendant moved the court to direct the jury to acquit him. The motion was denied, and he thereupon rested without offering any evidence. The apparent theory of the prosecution is that the defendant Woolsey is guilty as a principal, being criminally responsible for the representations and inducements made by Stone, his authorized agent. From a perusal of the entire record, and particularly noting all evidence reflecting upon the possible guilt of the defendant Woolsey, it appears that at least from early in the year 1921 until the month of May, 1926, the defendant Woolsey maintained an office in the city of Miles City. This is deduced from the fact that Ethel E. Lasswell testified that she was there employed by him in the capacity of a stenographer for a period of about 7 months prior to the fall of 1921, when she moved to Lewiston, Idaho; the subscription blanks used by him in connection with the Western Home Improvement Company, a corporation, which, in the year 1922, he had in process of organization, gave Miles City as his address as well as that of the company, and letters written by him as late as May 13, 1926, indicate that he still continued his office at that place. In the fall of the year 1922, at Lewiston, Idaho, he told Miss Lasswell that he was organizing a building and loan association and requested her to act as the president of such corporation, which she agreed to do. She was not acquainted with W. B. Stone, but at that time the defendant Woolsey said "that he was going to try to get Mr. Stone to sell stock of the Western Home Improvement Company." Stone was actively engaged soliciting stock subscriptions in the city of Missoula for the company proposed the latter part of March, 1923. The stock subscription form used by Stone in obtaining contracts for the purchase of the capital stock in the corporation to be formed reads, in part, as follows:
"Western Home Improvement Company, Miles City, Montana. This book is the property of ------.
The Home Builder-Your Home Built the Way You Want it.
Capital, $500,000. Fully paid and nonassessable. Preferred stock, $250,000. Common stock, $250,000. Shares, $50 each. Sold only in combination of one share each of preferred and common for $100. Terms-$20 down, $10 each month, for 8 months, to Western Home Improvement Company.
Western Home Improvement Company. Officers: E. E. Lasswell, President; Wm. Whitney Ames, Vice President; G. V. Woolsey, Secretary and Treasurer. Directors: Robt. D. Kent, President, Merchants' Bank of Passaic, N. J.; H. L. Gleason, Advertising, New York City; William Whitney Ames, Attorney, Montclair, N. J.; G. V. Woolsey, Miles City, Mont. * * *
Application Blank. -----, 192-.
I hereby apply for ----- combination shares of stock of the Western Home Improvement Company, for the sum of $ -----, and have paid your representative the sum of $ ----- as first payment, and agree to pay $ ----- to the Western Home Improvement Company, at its home office, each and every 30 days thereafter, until the full purchase price has been paid.
Name: -----.
Address: -----.
The first payment of $20 on each combination of stock is to be collected by the agent, who will enter the payment in this book, This serves as a receipt. Each month's payments are to be made direct or by mail to the Western Home Improvement Company, Miles City, Montana. When the last payment has been made, the secretary will issue a stock certificate and take up this book. Do not fail to make your payments regularly. He who owns a home owns freedom and security for self and family."
The latter part of March, 1923, Stone called at the blacksmith shop conducted by John Doll, in the city of Missoula, and solicited the latter to make purchase of some of the stock. Stone said to Doll:
"I am selling building and loan stock; we organized a building and loan stock company at Miles City, and I am one of the agents to sell this stock."
Doll inquired:
"How do you handle your stock or your finances?"
Stone replied:
"Buy and sell real estate or residences, and loan money to the stockholders to build their residences with."
Doll asked:
"What percentage do you allow on property?"
And Stone replied:
"We allow from 50 to 60 per cent., according to the location of the property."
In the evening of the same day Stone called at Mr. Doll's residence, and again discussing the subject Stone said:
"We can sell only $500 worth of stock to each individual, because our secretary and manager gave me orders not to sell any more to any individual than that $500."
Shortly thereafter Stone took up his place of abode in Missoula with the Dolls, and remained with them from April until August 1923. During that time he boarded and roomed with them, and on many occasions discussed with them the advantages of the Western Home Improvement Company as a building and loan corporation. As a result of such discussions he agreed to permit the Dolls to subscribe for a greater amount of the stock than the limit of $500 fixed as to any one person, should they so desire. Thereupon he obtained stock subscriptions for such stock, to the aggregate amount of $6,500, from the Doll household, which subscriptions were fully paid during the period from the latter part of March to July 2, 1923. Mrs. Doll's mother, who had made her home with the Dolls for 20 years, and was then living with them, gave Mr. Stone her subscription for stock to the aggregate amount of $2,500, which subscription was later assigned to Mrs. Doll, and the stock when issued on May 5, 1923, was executed in the name of the latter. The Dolls paid $500 to Stone as an investment for their daughter Cora Wynona Doll, and certificates for 5 shares each of the common and preferred capital stock of the corporation, issued in the...
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